Earlier this week the UK’s parliament voted for further Brexit uncertainty, with the EU now expected to delay the United Kingdom’s departure from the bloc. While this uncertainty has caused investment to dry up in some industries, companies appear to still be investing in IT infrastructure at the digital edge at a rapid pace. 

That’s according to the latest Global Interconnection Index (GXI), an annual market study published by Equinix. It predicts that private connectivity at the edge will grow by 51% compound annual growth rate (CAGR), and exceed a total bandwidth capacity of more than 13,300 Tbps, equivalent to 53 zettabytes of data exchanged annually. 

The GXI market study finds interconnection bandwidth – the capacity for direct and private traffic exchange between key business partners – is an essential component to digital business and validates that to compete in the digital economy, companies must address growing data volumes and increasing data exchange velocity across a rising number of clouds and business ecosystems.

In fact, according to a separate independent survey commissioned by Equinix, of more than 2,450 global senior IT professionals, almost half (48%) of global IT decision-makers believe interconnection is a key facilitator of digital transformation. 4 in 10 IT decision-makers in EMEA feel the same and, in the UK, over a third (33%) of IT decision-makers cite interconnection as being key to the survival of their business. And companies are continuing to invest in this critical infrastructure, with almost half (49%) of IT decision-makers in the UK stating that any uncertainty around the final Brexit deal has not impacted their company’s decision to invest in IT infrastructure.

“People, software and machines are creating and consuming data faster and in all the places where we work, play, and live,” said Rick Villars, research vice president, Datacenter & Cloud, IDC. 

“The significant increase in data created, aggregated and analysed in these new locations is contributing to a major shift away from deploying IT in traditional corporate data centres. Enterprises need access to robust, modern data centre facilities near the edge locations where businesses want to deploy dedicated infrastructure and interconnect to the increasing number of clouds, customers and partners that are at the core of digital transformation efforts.”

Strong data compliance regulations across Europe are unlocking data exchange and growth of interconnection bandwidth in Healthcare & Life Sciences, Government & Education, and Business & Professional Services. This is leading Europe (51% CAGR) to overtake North America (46% CAGR) in the race to digital growth. Latin America is leading the charge with a 63% CAGR, with Asia-Pacific not far behind (56% CAGR). 

Expansion plans across the world, according to the survey, tell a slightly different story with 55% of EMEA businesses – and 42% of UK businesses, specifically – planning to expand into new metros, versus more aggressive expansion plans in other regions (Americas 69%, Asia-Pacific 65%). 6 out of 10 (62%) IT decision-makers globally, and over half (53%) in the UK, are utilising virtual connections to support these growth plans.

Key Findings:

The GXI Vol. 3 delivers insights by tracking, measuring and forecasting growth in interconnection bandwidth—the total capacity provisioned to privately and directly exchange traffic, with a diverse set of partners and providers, at distributed IT exchange points inside carrier-neutral colocation data centers. The GXI finds:

The ability to exchange large volumes of data through interconnection is essential to compete in the digital economy

• In response to rapidly growing volumes of data, enterprise consumption of interconnection bandwidth will grow at a 64% CAGR globally, outpacing other forms of business data exchange. This is due to be even higher for EMEA, with consumption growing at a 67% CAGR, leading enterprises to account for 60% of total interconnection bandwidth in 2022. And, by 2022, London alone will account for over a third (34%) of European traffic, with leading European cities – Frankfurt, London, Amsterdam and Paris – together accounting for almost 78% of European traffic.
• To manage increasing volumes of data, enterprises are on average deploying in nine locations, with a total of 340 interconnections to networks clouds and business partners. The survey shines more light on this – IT decision-makers in the UK are utilising interconnection to connect to other enterprises (20%), network service providers (23%) and cloud service providers (39%).

• The independent survey found that over a third (34%) of IT decision-makers in the UK, believe interconnection can help their business to gain competitive advantage within the marketplace. This assertion was true for almost half (46%) of global IT decision-makers and for 4 out of 10 (39%) IT decision-makers in EMEA.

Distance is the biggest performance killer for digital business

• Deploying direct, private connections at the edge propels both application performance and user experience.
• Today’s latency-sensitive workloads require response times ranging from <60 to <20 milliseconds, forcing IT infrastructure closer to the points of consumption (the edge).
• According to the survey, a quarter (25%) of IT decision-makers in the UK are using interconnection to increase speed of connectivity. This compares to a finding of almost a third (31%) in EMEA and over a third (34%) globally. To add to this, 6 out of 10 (60%) IT decision-makers in the UK are using interconnection to improve security and half (50%) are using it to reduce the cost of connectivity.

Leading businesses are gaining competitive advantage using a combination of key interconnection deployment models

• Interconnecting to multiple network providers across multiple edge locations is the most prominent use case for interconnection bandwidth and is expected to grow 4x by 2022. According to the survey, optimising the performance of networks is a key priority for almost half (46%) of IT decision-makers in the UK. 
• Interconnecting to multiple clouds and IT services across multiple edge locations and cloud regions represents the next largest and fastest use of interconnection bandwidth and is predicted to grow 13x by 2022. The move to multi-cloud strategies is cited by respondents to the survey as a priority for over a third (36%) of IT decision-makers in the UK.
• Interconnecting to digital business partners for financial services, content and digital media and supply chain integration makes up the remainder of interconnection bandwidth use cases and is forecasted to grow 5x by 2022.