REDWOOD CITY, Calif.,
Aug. 16, 2017 /PRNewswire/
-- The capacity for private data exchange between businesses
is outpacing the public Internet, growing at nearly twice the rate
and comprising nearly six times the volume of global IP traffic by
2020, according to the Global Interconnection Index, a new
market study published by Equinix that analyzed the adoption
profile of thousands of carrier-neutral colocation data center
providers and ecosystem participants globally. As business models
become increasingly digital, distributed and dependent on the
real-time engagement of many more users, partners and service
providers, the Index is a powerful new research tool. It highlights
how companies are translating digital transformation into action
and creating entirely new ways of connecting with their customers,
partners and supply chain. The Index will provide an annual
baseline to track, measure and forecast the growth of
Interconnection Bandwidth, defined as the total capacity
provisioned to privately and directly exchange traffic with a
diverse set of counterparties and providers at distributed IT
exchange points.
Experience the interactive Multichannel News Release here:
https://www.multivu.com/players/English/8059151-equinix-global-interconnection-index/
"Some of the greatest technology trends of our lifetime,
including mobile, social, cloud and the explosion of data, are
creating disruption on the scale of the Industrial Revolution,"
said Sara Baack, Chief Marketing
Officer for Equinix, Inc. "In this new reality, it's a
'scale-or-fail' proposition and companies are succeeding by
adopting Interconnection, locating their IT infrastructure in
immediate proximity to an ecosystem of companies that gather to
physically connect their networks to those of their customers and
partners. Interconnection helps fuel digital transformation by
supporting multicloud consumption at scale, improving network
latency and performance, enabling greater operational control, and
reducing security risk."
According to the Index, Interconnection Bandwidth is expected to
grow at a 45 percent CAGR to reach 5,000 Tbps by 2020, dwarfing
Global IP traffic in both growth (24 percent) and volume (855
Tbps)1. It is also growing faster than Multiprotocol
Label Switching (MPLS), the legacy model of business connectivity,
by a factor of 10x (45 percent to four percent)2.
Key macroeconomic, technology and regulatory trends that are
impacting Interconnection growth include:
- Digital Technology Use, which forces the need to support
real-time interactions requiring more Interconnection Bandwidth.
According to Accenture, digital technology use is projected to add
$1.36 trillion in additional economic
output in the world's top 10 economies by 20203.
- Urbanization, which is transforming global demographics
and creating a proximity need for digital services concentrated
across metro centers globally. More than two billion people are
expected to migrate to major cites by 2035, creating as many as 50
major urban metro hubs4 requiring dense Interconnection
fabrics.
- Cybersecurity Risk, which expands Interconnection
consumption as firms increasingly shift to private data traffic
exchange to bypass the public Internet and mitigate against digital
threats. By 2020, an estimated 60 percent of digital businesses
will suffer major service failures5 as breaches permeate
across physical and digital platforms.
- Global Trade of Digitally Deliverable Services, which
ushers in a new era of dynamic business processes and demand for
Interconnection. Global digital workflows require a global mesh of
Interconnected metros to fulfill demand. According to
McKinsey6, trade in digitally deliverable services now
comprises 50 percent of total services exports globally, with an
expected 9x increase by 2020.
Highlights / Key Facts
- The Index provides significant insight into regional
differences in how Interconnection is accelerating in different
regions of the world. While the U.S. is forecast to have the
largest amount of Interconnection Bandwidth, it is the most mature
region, and other regions are more rapidly provisioning
Interconnection Bandwidth to rival the projected deployment levels
in the U.S. The following table outlines projections across all
four regions:
Interconnection
Installed Bandwidth Capacity (Tbps)
|
|
2016
|
2017
|
2018
|
2019
|
2020
|
CAGR
|
Region
|
|
|
|
|
|
|
US
|
472
|
654
|
913
|
1,275
|
1,795
|
40%
|
EU
|
335
|
473
|
681
|
987
|
1,451
|
44%
|
AP
|
246
|
355
|
519
|
759
|
1,120
|
46%
|
LATAM
|
92
|
154
|
249
|
395
|
626
|
62%
|
Total
Region
|
1,144
|
1,636
|
2,363
|
3,417
|
4,991
|
45%
|
- The Index also forecasts Interconnection Bandwidth by use case
for both enterprises and service providers. The largest use case is
associated with traditional IT deployment models, in which
businesses connect to network providers as an intermediary path to
reach business partners and customers. However, the fastest growing
use case is enterprises connecting directly to a range of cloud and
IT service providers, confirming the transformational shift of IT
infrastructure from centralized, enterprise-owned data centers to
decentralized, physically dispersed multicloud environments. The
following table outlines projections for the top enterprise and
service provider use cases:
Interconnection
Installed Bandwidth Capacity (Tbps)
|
|
2016
|
2017
|
2018
|
2019
|
2020
|
CAGR
|
Enterprise Use
Cases
|
|
|
|
|
|
|
Interconnecting to
Network Providers
|
372
|
571
|
880
|
1,341
|
1,986
|
52%
|
Interconnecting to
Cloud & IT Providers
|
12
|
31
|
80
|
209
|
547
|
160%
|
Interconnecting to
Supply Chain Partners
|
5
|
9
|
17
|
29
|
45
|
73%
|
|
|
|
|
|
|
|
Service
Provider Use Cases
|
|
|
|
|
|
|
Interconnecting to
Network Providers
|
537
|
703
|
913
|
1,167
|
1,459
|
28%
|
Interconnecting to
Cloud & IT Providers
|
30
|
50
|
85
|
145
|
248
|
70%
|
- The centricity of digital technology is disrupting how business
is done across all industries, forcing companies to invent new,
information-centric business models. The Index forecasts the
banking and insurance segment will be the largest
consumer of Interconnection Bandwidth, as digitization is forcing
this industry to support new customer engagement models.
Telecommunications is projected to be the second largest segment,
with the need to provide coverage in many new locations and support
the proliferation of connected devices and sensors. The third
largest segment is projected to be cloud and IT services as it
provides a critical building block for digital enablement. The
following table breaks down the projections by industry:
Interconnection
Installed Bandwidth Capacity (Tbps)
|
|
2016
|
2017
|
2018
|
2019
|
2020
|
CAGR
|
By
Industry
|
|
|
|
|
|
|
Banking &
Insurance
|
144
|
230
|
367
|
590
|
958
|
61%
|
Telecommunications
|
319
|
409
|
523
|
662
|
826
|
27%
|
Cloud & IT
Services
|
221
|
314
|
445
|
607
|
820
|
39%
|
- As crucial as Interconnection is to how digital business is
conducted, it has never been quantified. The Global Interconnection
Index changes this with industry-first projections of how
Interconnection growth and access will unfold through 2020. This
in-depth view arms businesses with the data-driven insight they
need to consider their own Interconnection strategy for digital
business success. For the first time, organizations can see
multi-dimensional projections of Interconnection Bandwidth
requirements by region, industry, use case, firmographics and
maturity model.
Industry Perspectives on the Global Interconnection
Index
- Brad Casemore, Research
Director, Datacenter Networks, IDC:
"Interconnection is
an integral building block for digital business. The Global
Interconnection Index provides a barometer of the growing relevance
of the need to solve for proximity to digital services across all
industries. This need is driven by latency, accelerating time to
market and integrating multicloud on a local basis."
- Munu Gandhi, Vice President, Core Infrastructure Services,
Aon:
"The Global Interconnection Index
captures a critical component to enabling digital business:
Interconnection. Reliable and robust Interconnection
capabilities across ecosystems like those outlined in the Index
will be increasingly important for companies to enable new paths
for global growth and opportunity."
About The Global Interconnection Index
The Global Interconnection Index was developed by creating a
market baseline that analyzed the deployment profile of thousands
of carrier-neutral colocation data center providers and the
participants deployed within them globally across every region and
major metro. This data was combined with local and regional market
data (including macroeconomic trends, market demographics and
industry concentrations), and with key demand drivers of digital
business, to form a weighted demand multiplier to assist in
predicting growth to factor the impact of digital business
transformation. A detailed methodology description is included in
the Global Interconnection Index.
Additional Resources
- Interconnection Strategy Guide
- Global Interconnection Index Infographic
- Colocation-Based Interconnection Will Serve as the 'Glue' for
Advanced Digital Business Applications [Gartner Report]
- Interconnection 201: Blueprints for the Interconnected
Enterprise [451 Research Report]
- www.IOAKB.com [Interconnection Open Community
Knowledgebase]
Footnotes
- Cisco -- Visual Networking Index: Forecast and Methodology,
2016–2021, June 7, 2017
- Research and Markets -- Global MPLS Market Growth of 4.4% CAGR
by 2021, September 2016
- Accenture Strategy -- Digital Density Index: Guiding Digital
Transformation
- "Connectography" by Parag
Khanna, April 19, 2016
- Gartner -- Special Report: Cybersecurity at the Speed of
Digital Business, August 30, 2016
(ID: G00315580)
- McKinsey Global Institute -- Digital Globalization: The New Era
of Global Flows, March 2016
About Equinix
Equinix, Inc. (Nasdaq: EQIX) connects the world's leading
businesses to their customers, employees and partners inside the
most interconnected data centers. In 44 markets worldwide, Equinix
is where companies come together to realize new opportunities and
accelerate their business, IT and cloud strategies.
http://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 risks described from time to time in
Equinix's filings with the Securities and Exchange Commission. In
particular, see Equinix's recent 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.
Equinix and IBX are registered trademarks of Equinix, Inc.
International Business Exchange is a trademark of Equinix, Inc.
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