Supply chain shortages and pandemic spur IT investment – Equinix report

Supply chain shortages are hastening enterprises' investment in virtualization and digital infrastructure, according to a report by Equinix.

Equinix recently surveyed 2,900 IT decision-makers in the Americas, APAC and EMEA for the Equinix 2022 Global Tech Trends Survey.

Supply chain challenges spark investment in digital infrastructure

Among US respondents, 63% said their business was plagued by global supply chain issues and shortages, and 64% indicated that the global microchip shortage is a threat to their business.

The ongoing supply chain challenges are underpinning a need for more reliance on virtualization and enterprises are planning for significant investment in their digital infrastructure, according to Equinix. Over one-third of IT-decision makers in the US, or 34%, plan to facilitate global expansion plans by deploying virtually via the cloud. Overall, 73% of US respondents said their organization is planning global expansion into new cities, countries or regions.

Figure 4: How do you plan on supporting global expansion from an IT perspective? Source: Equinix. Click here for a larger version of this image.

In addition, 61% of US IT-decision makers anticipate increased spending on carrier-neutral colocation services to support increased digital deployments. Of US respondents, 57% are planning to increase investment in interconnection services to further their digital transformation progress.

As enterprises navigate disruptions from inflation, supply chain issues and skills gaps that emerged in the first half of this year, "IDC consistently hears from IT leaders that timely and expansive access to innovative technology, interconnectivity and intelligent SaaS resources is critical," said Rick Villars, VP for IDC, in a statement.

Digital infrastructure companies that can provide enterprises with the necessary facilities and connectivity options, plus hybrid and multi-cloud services, "will play a vital role in helping IT teams make sustainable technology investment decisions and take full advantage of SaaS and digital infrastructure," Villars added.

Where the pandemic plays a positive role in IT

The pandemic has also had a significant impact on enterprises' digital strategies as 46% of US IT leaders plan to accelerate their company's "digital evolution" as a result of COVID-19. IT departments are experiencing some positive results of the pandemic – 54% stated their IT budgets have increased as a direct outcome of the pandemic. In addition, 57% predict that the technology changes and investments implemented during the pandemic will remain for the foreseeable future.

Figure 2: The COVID-19 pandemic has impacted many areas of business, including IT strategy and investment. For each of the following pairs of statements, please choose the one that applies best to your business. Source: Equinix. Click here for a larger version of this image.

"In recent years, bold global expansion could have been seen as too risky or too dependent on capital investment in physical infrastructure. Now, things have changed," said Karl Strohmeyer, chief customer officer at Equinix, in a statement. "Using new digital models, companies can deploy in new markets at relatively low cost and without sacrificing resiliency."

Shift to the cloud and XaaS models

Cloud services are also becoming more important to enterprises with 77% of IT leaders in the US planning to move more business functions to the cloud. Of those respondents, 55% plan to move additional business-critical applications to the cloud, and 61% pan to move security functions to the cloud.

Figure 3: How much of a priority is each of the following for your organization's technology strategy? Source: Equinix. Click here for a larger version of this image.

About 74% of US respondents are shifting to an Everything-as-a-Service (XaaS) model. Among their reasons for moving to a XaaS model are simplification of IT infrastructure (62%), flexibility (53%), cost reductions (49%) and improved user experience (42%).

IT leaders also have sustainability in mind as they update their IT infrastructure; 69% of US respondents said they are measuring and actively trying to limit the environmental impact of their IT equipment. In addition, 67% plan to only select IT partners that meet key carbon reduction targets.

— Kelsey Kusterer Ziser, Senior Editor, Light Reading