REDWOOD CITY, Calif. – 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.
“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). 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).
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
- 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.
Equinix Inc. (Nasdaq: EQIX)