October 15, 2019

Undeterred by Brexit uncertainty, UK businesses continue to invest in IT infrastructure at the digital edge

Global market study and independent survey shows companies are leveraging interconnection to compete in the digital economy as data explosion gets further distributed at the edge

LONDON – Oct. 15, 2019 – The latest Global Interconnection Index (GXI), an annual market study published by Equinix, predicts private connectivity at the edge will grow by 51% compound annual growth rate (CAGR), and exceed a total bandwidth capacity of more than 13,300 Tbps, equivalent to 53 zettabytes of data exchanged annually. This is enough to support every person on earth simultaneously downloading a complete season of Game of Thrones in ultra-high definition resolution in less than a single day.

The GXI market study finds interconnection bandwidth – the capacity for direct and private traffic exchange between key business partners – is an essential component to digital business and validates that to compete in the digital economy, companies must address growing data volumes and increasing data exchange velocity across a rising number of clouds and business ecosystems. In fact, according to a separate independent survey commissioned by Equinix of more than 2,450 global senior IT professionals, almost half (48%) of global IT decision-makers believe interconnection is a key facilitator of digital transformation. 4 in 10 IT decision-makers in EMEA feel the same and, in the UK, over a third (33%) of IT decision-makers cite interconnection as being key to the survival of their business. And companies are continuing to invest in this critical infrastructure, with almost half (49%) of IT decision-makers in the UK stating that any uncertainty around the final Brexit deal has not impacted their company’s decision to invest in IT infrastructure.

“People, software and machines are creating and consuming data faster and in all the places where we work, play, and live,” said Rick Villars, Research Vice President, Datacenter & Cloud, IDC. “The significant increase in data created, aggregated and analysed in these new locations is contributing to a major shift away from deploying IT in traditional corporate data centres. Enterprises need access to robust, modern data centre facilities near the edge locations where businesses want to deploy dedicated infrastructure and interconnect to the increasing number of clouds, customers and partners that are at the core of digital transformation efforts.”

Strong data compliance regulations across Europe are unlocking data exchange and growth of interconnection bandwidth in Healthcare & Life Sciences, Government & Education, and Business & Professional Services. This is leading Europe (51% CAGR) to overtake North America (46% CAGR) in the race to digital growth. Latin America is leading the charge with a 63% CAGR, with Asia-Pacific not far behind (56% CAGR). Expansion plans across the world, according to the survey, tell a slightly different story with 55% of EMEA businesses – and 42% of UK businesses, specifically – planning to expand in to new metros, versus more aggressive expansion plans in other regions (Americas 69%, Asia-Pacific 65%). 6 out of 10 (62%) IT decision-makers globally, and over half (53%) in the UK, are utilising virtual connections to support these growth plans.

Key Findings:
The GXI Vol. 3 delivers insights by tracking, measuring and forecasting growth in interconnection bandwidth—the total capacity provisioned to privately and directly exchange traffic, with a diverse set of partners and providers, at distributed IT exchange points inside carrier-neutral colocation data centers. The GXI finds:

The ability to exchange large volumes of data through interconnection is essential to compete in the digital economy

  • In response to rapidly growing volumes of data, enterprise consumption of interconnection bandwidth will grow at a 64% CAGR globally, outpacing other forms of business data exchange. This is due to be even higher for EMEA, with consumption growing at a 67% CAGR, leading enterprises to account for 60% of total interconnection bandwidth in 2022. And, by 2022, London alone will account for over a third (34%) of European traffic, with leading European cities – Frankfurt, London, Amsterdam and Paris – together accounting for almost 78% of European traffic.
  • To manage increasing volumes of data, enterprises are on average deploying in nine locations, with a total of 340 interconnections to networks clouds and business partners. The survey shines more light on this – IT decision-makers in the UK are utilising interconnection to connect to other enterprises (20%), network service providers (23%) and cloud service providers (39%).
  • The independent survey found that over a third (34%) of IT decision-makers in the UK, believe interconnection can help their business to gain competitive advantage within the marketplace. This assertion was true for almost half (46%) of global IT decision-makers and for 4 out of 10 (39%) IT decision-makers in EMEA.

Distance is the biggest performance killer for digital business

  • Deploying direct, private connections at the edge propels both application performance and user experience.
  • Today’s latency-sensitive workloads require response times ranging from <60 to <20 milliseconds, forcing IT infrastructure closer to the points of consumption (the edge).
  • According to the survey, a quarter (25%) of IT decision-makers in the UK are using interconnection to increase speed of connectivity. This compares to a finding of almost a third (31%) in EMEA and over a third (34%) globally. To add to this, 6 out of 10 (60%) IT decision-makers in the UK are using interconnection to improve security and half (50%) are using it to reduce the cost of connectivity.

Leading businesses are gaining competitive advantage using a combination of key interconnection deployment models

  • Interconnecting to multiple network providers across multiple edge locations is the most prominent use case for interconnection bandwidth and is expected to grow 4x by 2022. According to the survey, optimising the performance of networks is a key priority for almost half (46%) of IT decision-makers in the UK. 
  • Interconnecting to multiple clouds and IT services across multiple edge locations and cloud regions represents the next largest and fastest use of interconnection bandwidth and is predicted to grow 13x by 2022. The move to multi-cloud strategies is cited by respondents to the survey as a priority for over a third (36%) of IT decision-makers in the UK.
  • Interconnecting to digital business partners for financial services, content and digital media and supply chain integration makes up the remainder of interconnection bandwidth use cases and is forecasted to grow 5x by 2022.

Quotes:

  • Sachin Gupta, Senior Vice President, Product Management, Enterprise Networking Business, Cisco
    “As enterprises embrace the imperative of digital transformation, they increasingly adopt multiple cloud-based applications to meet their objectives. This places pressure on the network to deliver a fast and secure application experience to users located anywhere in the world. With both applications and networks becoming more distributed, enterprises today will continue to require a low-latency, interconnected architecture to securely connect end users with business-critical applications.”
     
  • Eugene Bergen Henegouwen, President, EMEA, Equinix
    “Europe’s predicted CAGR of 51%, illustrates the fact that enterprises across the continent are increasingly using new and innovative ways of interconnecting with their customers and partners, to stay relevant and gain a competitive advantage. In line with this, results from our independent survey found the EMEA region has the largest proportion of organisations – at 63% – using interconnection to support their expansion into new regions, countries or metros. This shows interconnection is a critical business asset for companies increasingly looking to operate across borders and in doing so, broaden customer bases”. 
     
  • Russell Poole, Managing Director, UK, Equinix
    “With Brexit looming, businesses in the UK are continuing to forge ahead with plans to invest in IT infrastructure, as new technologies, such as AI, IoT and the soon-to-be launched 5G network, promise a rapid increase in data being created, consumed and shared. The results of this survey demonstrate almost half (45%) of businesses in the UK are prioritising moving their infrastructure to the digital edge as part of their organisation’s technology strategy, in turn facilitating interconnection between new and existing partners, and customers around the world. Regardless of the potential impact of the UK’s departure from the EU, having a strong digital infrastructure in place, is crucial to the success of a business”.

About the Global Interconnection Index (GXI)
The Global Interconnection Index, published annually by Equinix, delivers insights that drive digital business advantage by tracking, measuring and forecasting growth in interconnection bandwidth—the total capacity provisioned to privately and directly exchange traffic with a diverse set of counterparties and providers at distributed IT exchange points. The Global Interconnection Index is the industry’s only market study that projects how interconnection bandwidth growth will unfold through 2022. The report serves as a market baseline that analyses the deployment profile of thousands of ecosystem participants using carrier-neutral colocation data center providers globally. This data was combined with local and regional market data (including macroeconomic trends, market demographics and industry concentrations) to form a weighted demand multiplier to assist in predicting growth and assess impact on digital business transformation. A detailed methodology description is included in the Global Interconnection Index.

About the Equinix independent survey
As part of a separate independent study commissioned by Equinix, APCO Insight surveyed 2,485 IT decision-makers from a diverse enterprise set across North America, Latin America, Europe and Asia-Pacific. 1,348 of those surveyed are based in EMEA, with 103 being based in the UK. Respondents were selected for participation from Dynata’s online panel. The survey was conducted online between August 1-16, 2019.

Additional Resources 

About Equinix
Equinix, Inc. (Nasdaq: EQIX) connects the world's leading businesses to their customers, employees and partners inside the most-interconnected data centers. On this global platform for digital business, companies come together across more than 50 markets on five continents to reach everywhere, interconnect everyone and integrate everything they need to create their digital futures. www.equinix.com.

Forward-Looking Statements
This press release contains forward-looking statements that involve risks and uncertainties. Actual results may differ materially from expectations discussed in such forward-looking statements. Factors that might cause such differences include, but are not limited to, the challenges of acquiring, operating and constructing IBX data centers and developing, deploying and delivering Equinix services; unanticipated costs or difficulties relating to the integration of companies we have acquired or will acquire into Equinix; a failure to receive significant revenue from customers in recently built out or acquired data centers; failure to complete any financing arrangements contemplated from time to time; competition from existing and new competitors; the ability to generate sufficient cash flow or otherwise obtain funds to repay new or outstanding indebtedness; the loss or decline in business from our key customers; and other risks described from time to time in Equinix filings with the Securities and Exchange Commission. In particular, see recent Equinix quarterly and annual reports filed with the Securities and Exchange Commission, copies of which are available upon request from Equinix. Equinix does not assume any obligation to update the forward-looking information contained in this press release.

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