October 16, 2019

Private Connectivity at the Edge to Grow by Over 50 Percent Annually across EMEA

Global market study shows companies are leveraging interconnection to compete in the digital economy, while ICT decision-makers feel that Finland’s importance as a gateway for data traffic will increase over next five years.

HELSINKI, Finland – October 16, 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.

The independent survey also reveals that Finnish ICT decision makers are very confident about Finland’s growing role as a major data traffic gateway, with 86% of respondents believing Finland’s importance will increase over the next five years. Finnish respondents also feel strongly about edge connectivity: close to 90% of IT decision-makers feel it is important that their data center provider is located in Finland. Of the Finnish ICT leaders surveyed, 43% said their businesses are looking to expand into new markets with 57% utilizing virtual connections, meaning that they can do so in a flexible and cost-effective manner rather than having to invest in physical infrastructure.

Strong data compliance regulations across EMEA 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). Complying with data protection regulation was also seen as the biggest priority to Finnish ICT leaders (68% of respondents), along with improving their organization’s cyber security and digitalizing their IT infrastructure.

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.
  • 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 EMEA are utilizing interconnection to connect to other enterprises (25% - Finland 22%), network service providers (31% - Finland 33%) and cloud service providers (26% - Finland 21%).
  • The independent survey found nearly half (46%) of global IT decision-makers believe interconnection can help their business to gain competitive advantage within the marketplace. This assertion was true for 4 out of 10 (39%) IT decision-makers in EMEA, and 1 in 4 in Finland.

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, more than one-third (34%) of global IT decision-makers (and 31% across EMEA) are using interconnection to increase speed 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, optimizing the performance of networks is a key priority for over half (54%) of IT decision-makers across EMEA, and for 44% in Finland.
  • 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 almost half (45%) of global IT decision-makers.
  • 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:

  • 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”.
  • Sami Mattila, Director, DevOps, RELEX Solutions
    “As a provider of supply chain planning solutions to the retail industry in the U.S. and Europe, connectivity, reliability, and scalability are essential to our business. Our digital edge strategy places strategic control points next to users, and also cloud connectivity plays a major role. As stated in Equinix’s GXI vol 3, interconnection is a key facilitator for digital transformation worldwide, and for us it is vital for our global expansion.”
  • Sami Holopainen, Managing Director, Equinix Finland comments:
    “Finland’s importance as a data gateway to the east has grown significantly over the past decade. We have built a super-fast subsea cable connection between Helsinki and Frankfurt and we have the major Arctic Connect project soon to get underway, which will provide a new route for low-latency fast fiber connections between Europe, Northern Russia, Asia and North America. The findings of our survey underline this increasingly important position, with the majority of Finnish ICT leaders believing Finland’s importance as a gateway for data exchange will increase over the next five years.”

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 analyzes 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, and 108 in Finland. 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

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