Equinix, Inc. (Nasdaq: EQIX), the global Interconnection and data centre company, today announces its second annual Global Interconnection Index (GXI), a market study published by Equinix that analyses direct and private traffic exchange between businesses. It found that Interconnection is becoming the de facto method for companies to operate in today’s digital world and the growth of private connectivity between businesses will be 10 times the growth in volume of internet traffic in the next three years.
The Index forecasts that Interconnection is to grow to 8,200+ terabits per second (Tbps) by 2021 – a dramatic increase on last year’s projection of 5,000Tbps by 2020. This represents a significant compound annual growth rate (CAGR) of 48%, almost double the expected 26% CAGR of global IP Traffic.
Maurice Mortell, managing director for Ireland and emerging markets, Equinix, said: “The internet is really giving way to the interconnected-net of things and the Global Interconnection Index reflects this. Companies are solving their increasing digital requirements by directly connecting to key business partners through Interconnection, as traditional forms of connectivity do not meet the demanding requirements of today’s businesses.”
Interconnection and Ireland
To examine how Irish enterprises are using Interconnection in response to rising digital workloads, Equinix carried out additional research amongst IT decision-makers of medium- to large-sized enterprises based in Ireland. It shows that as more and more businesses embark on digital transformation journeys, IT professionals are becoming concerned about the use of the public internet – burdened by latency and security issues – to the point where they will avoid it to achieve their business goals.
Some 50% of Irish IT leaders now believe that avoiding the public internet is essential for their business. A further one-third believe that Interconnection is key to stopping the slow-down of the public internet as direct physical and virtual interconnections allow for more reliable, fast and secure performance. As a result, on average, Irish-based enterprises predict that their private data exchange with other businesses, customers and partners will increase by 48% in the next three years.
As digital demands rise and speed of delivery becomes currency, Irish organisations are focusing on digital transformation. However, almost half (46%) say latency issues are a major concern for them and 91% now view Interconnection as a key facilitator of successful digital transformation. Meanwhile, improving cyber security – cited by 50% – is the top technology-driven priority for Irish enterprises.
Maurice Mortell said: “Enterprises are moving en masse to a more interconnected way of carrying out business as they prepare for a digital-first world. They see Ireland as an excellent place to do this – 87% of our respondents believe it is the best place in Europe to interconnect with partners and customers, supply chain and cloud service providers.
“Home to the world’s top internet and cloud service providers, Ireland has the digital ecosystem that enterprises today need as they seek new ways to extract value from the reams of data they are producing. Businesses are exploiting that through Interconnection and in doing so, they are transforming themselves and our digital economy.”
Some of the key macroeconomic, technology and regulatory trends that have driven Interconnection growth in the past year and will impact its future growth include:
- Digital business transformation, which drives the need to support real-time interactions between people, things, locations, clouds, and data. At least 50% of global GDP will be digitised by 2021, with growth in every industry driven by digitally enhanced offerings, operations, and relationships.
- 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 as data is distributed across a growing number of vulnerability points. Large-scale cybersecurity breaches are one of the most serious risks facing the world today, and the scale of the threat is expanding drastically. By 2021, the global cost of cybersecurity breaches is projected to reach US$6 trillion.
- Business ecosystems, which are experiencing an increase in mix of customers, partners, and employees and require digital ecosystems and Interconnection to scale. By 2021, organizations using a mix of intermediaries are projected to more than double, and active engagement with industries outside the organization’s native industry is projected to nearly triple.
Customer case study – Evros, Ireland
Evros is home to the largest indigenous Irish cloud platform, Digital Planet. With approximately 250 customers in eight countries across Europe, the UK and the US, it and its customers rely on Interconnection to scale, innovate and compete in the digital world.
Joe Brady is CIO at Evros and led the launch of Digital Planet in 2010 when the team manually built its own private connections between partners. Now, Interconnection has become a vital component of its day-to-day business.
Brady said: “It is absolutely essential. Innovation is all about speed; deploying new solutions, testing them and bringing them to market. Interconnection allows us to do that. It allows us to try new products out and get them to the customers in a matter of days, rather than months.
“Online connectivity is growing and becoming increasingly important for every business as they compete to bring out cutting edge technologies for their customers. It’s not just one cloud that enterprises want access to; it is multi-cloud, where they get different services from different providers. Linking those services through a private connection avoids latency issues and is secure. It has become a simple fact of doing business.”