Private Connectivity Between Businesses to Grow to Nearly 10x the Internet, According to 2nd Annual Global Interconnection Index

DUBAI, UAE:– Digital transformation is accelerating for every company in every industry, everywhere around the world. As a part of this necessary transition, people, software and machines are creating and consuming data faster and in more distributed locations than ever before, creating dissonance and driving businesses to private and direct Interconnection to solve their complex integration challenges.

According to the second annual Global Interconnection Index (the “GXI”), a market study published by Equinix that analyzes traffic exchange globally, Interconnection, or direct and private traffic exchange between key business partners, is becoming the defacto method for companies to operate in today’s digital world. Interconnection Bandwidth provisioned for this purpose is forecasted to grow by 2021 to 8,200+ Terabits per second (Tbps) of capacity, or the equivalent of 33 Zettabytes (ZB) of data exchange per year, a dramatic increase over the previous year’s projection and ten times the projected capacity of internet traffic¹. This represents a significant five-year compound annual growth rate (CAGR) of 48%, almost double the expected 26% CAGR of global IP Traffic.

“Significant macro, technology and regulatory trends are converging to form an unprecedented era of complexity and risk and forcing the integration of physical and digital worlds,” said Sara Baack, Chief Marketing Officer for Equinix, Inc. “The second volume of the Global Interconnection Index has found that 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.” 

Jeroen Schlosser, Managing Director, Equinix MENA said: “The trend of digital transformation is revolutionizing the MENA market, urging businesses to take innovative approaches such as cloud adoption. One of the ways businesses can use the cloud more securely is through direct, dedicated interconnections between network and cloud providers and users and data, bypassing the hacking and performance risks of the public internet. At Equinix, we see multi-cloud convergence hitting a tipping point and the cloud as a major catalyst for changing how enterprises will do business in the emerging global digital economy.”

As the global report shows, interconnection is key to ensure full digital transformation and for this, businesses will need to grow their interconnection bandwidth capacity (data exchange capacity).

“Every MENA business must understand and leverage Interconnection Bandwidth to compete in the digital age. This will require a regional drive among IT chiefs to re-architect their companies’ IT platforms.”

According to a separate independent study, commissioned by Equinix where UAE IT decision-makers were surveyed, over 75 % of respondents reported it is very important and key deciding factor to have

Cloud service providers in close proximity when choosing a data center. Commenting on the statistic, Jeroen added: “ Our Dubai data center acts as a regional hub, offering close proximity to multiple Cloud Service providers interconnecting a critical mass of industry participants in one place, allowing businesses to enhance performance and increase user satisfaction while reducing operational costs.”

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 to enable value capture. At least 50% of global GDP will be digitized by 2021, with growth in every industry driven by digitally enhanced offerings, operations and relationships².

• 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 trillion³.

• 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 are projected to nearly triple⁴.

According to the separate independent study commissioned by Equinix, in the UAE more than half (68%) of the IT decision-makers that were surveyed reported that interconnection will be more important to their organization in the next three years while 87% of respondents agreed that interconnection is a key facilitator to digital transformation. 

To capture digital value, companies will need to support real-time interactions by more strategically interconnecting the workflows across people, things, locations, cloud and data. The second volume of the GXI identifies four classes of Interconnection use cases⁵ along with an IT maturity model. Adopted in combination, these use cases create a digital-ready infrastructure for today’s businesses:

• Network Optimization to shorten the distance between users and services applications.
• Hybrid Multicloud to connect and segment traffic between multiple clouds and private infrastructure.
• Distributed Security to deploy and interconnect security controls at points of digital engagement.
• Distributed Data to deploy and interonnect data analytics in proximity to users. 

Silkwon Lee, President of Samsung SDS Middle East and Africa said: “Expanding geographically brings challenges, including the issue of how to connect different markets to each other. Distributed infrastructure is necessary, but they also need to be connected securely and dynamically to ensure that users can enjoy a seamless experience free of latency regardless of location. With the help of the Equinix’s interconnection platform, we are very well equipped to provide proximity to our customers to deliver optimal performance and the ability to rapidly enter new markets to meet future business demand." 

Farid Faraidooni, Deputy CEO, Enterprise Solutions, Emirates Integrated Telecommunications Company (EITC): “With a constant need to connect, grow and expand, enterprises today are adopting digital transformation like never before. As a technology-driven ICT service provider in the Middle East with formidable partnerships with global technology majors, our alliance with Equinix continues to grow in this interconnected era and is the de facto choice of a growing number of businesses. For firms looking to invest in enhancing their business models with speed, security, and scalability, datamena platform - an alliance between EITC and Equinix offers the ideal pathway – unmatched interconnections with networks, clouds, and vertical specific business ecosystems.” 

Highlights/Key Facts

• The GXI provides significant insight into regional differences in how growth in Interconnection Bandwidth is accelerating in different regions of the world.

• United States: As an early adoption market for digital business and the headquarters for the largest number of multinational enterprises, the United States is expected to see compound growth of 45% per annum, contributing more than 40% of Interconnection Bandwidth globally.
• Europe: A growing number of regulations requiring data compliance is serving as a catalyst of growth for Europe, which is predicted to grow 48% per annum, contributing to 23% of Interconnection Bandwidth globally.
• Asia-Pacific: Benefiting from rapid urbanization and home to many of the largest digital content providers, Asia-Pacific is anticipated to grow 51% per annum, contributing more than 27% of Interconnection Bandwidth globally.
• Latin America: Emerging market dynamics and growing digital business adoption positions Latin America for expected 59% per annum growth, contributing more than 9% of Interconnection Bandwidth globally.

• The GXI also forecasts Interconnection Bandwidth growth by counterparty categories, estimating the Interconnection behavior of each. Surpassing all other categories, Interconnection between Enterprises and Cloud and IT Providers is projected to grow 98% per annum through 2021, supporting businesses building out new digital services and migrating existing workloads to third-party cloud platforms.

According to the separate independent study, commissioned by Equinix in the UAE, over 70 % respondents agree that as the public internet becomes more saturated, interconnection is important to avoid the public internet slowing down.

Industry Perspectives on the Global Interconnection Index

• David Hicks, Vice President of WW, ISV, OEM and Java Business Development at Oracle:

“As enterprises increasingly adopt hybrid cloud architectures to accelerate their digital transformation initiatives, Interconnection is a proven design strategy for reaching cloud services such as Oracle Cloud Infrastructure in an efficient manner. Direct and private interconnection to Oracle Cloud Infrastructure FastConnect network connectivity platform helps provide predictable and consistent performance, isolation and availability.”

• Eric Hanselman, Chief Analyst at 451 Research :

“As enterprises chart their paths to greater digitization, they seek pathways that avoid the turbulence generated by the growing complexity of integrating various digital services. New architectures anchored by Interconnection smooth this complexity and, increasingly, enterprises are finding that they also yield improvements in security, performance and capacity. Equinix’s Global Interconnection Index provides useful insight into these digital trends including why businesses are directly connecting with strategic partners to build their digital business ecosystems.” 

Equinix experts will be available to discuss more about the second annual Global Interconnection Index and the need for interconnection in the region at GITEX Technology Week, from 14^th until 18^th October, in Hall 6, Stand 603 at Dubai World Trade Center.

-Ends-

About The Global Interconnection Index 

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. 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 2021. 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), 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. 

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 52 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 challenges of acquiring, operating and constructing IBX data centers and developing, deploying and delivering Equinix services; unanticipated costs or difficulties relating to the integration of companies we have acquired or will acquire into Equinix; a failure to receive significant revenue from customers in recently built out or acquired data centers; failure to complete any financing arrangements contemplated from time to time; competition from existing and new competitors; the ability to generate sufficient cash flow or otherwise obtain funds to repay new or outstanding indebtedness; the loss or decline in business from our key customers; and other risks described from time to time in Equinix filings with the Securities and Exchange Commission. In particular, see recent Equinix 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.

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© Press Release 2018