Private inter-business connectivity to grow to nearly 10x the Internet: Equinix

Over the next three years, global interconnection bandwidth is forecast to grow to 8,200+ Terabits per second of capacity, or the equivalent of 33 Zettabytes of data exchange per year – ten times the projected capacity of internet traffic.

According to Equinix’s Global Interconnection Index, this represents a significant compound annual growth rate (CAGR) of 48% by 2021, almost double the expected 26% CAGR of global IP traffic.

Asia-Pacific’s interconnection bandwidth is expected to grow at a 51% CAGR to 2,200+ Tbps by 2021, increasing much faster than the US and Europe.

Sydney continues to remain as one of the top metros in the region, with interconnection bandwidth capacity expected to more than quadruple by 2021. The city is forecasted to see an even more rapid acceleration in interconnection Bbndwidth growth of 48% CAGR from 2017 to 2021, compared to 44% CAGR from 2016 to 2020 as predicted last year.

“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 Equinix CMO Sara Baack. “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.”

Some of the key  trends that have driven this 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 60% of Australia’s GDP will be digitised by 2021, and 85% of Australian organisations will use flexible IT environments with hyper-agile architecture for application development in the same time frame according to industry analyst firm IDC.

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. Organisations within Asia-Pacific could lose up to a staggering amount of US$1.75 trillion to cyber security incidents – this amount accounts for 7% of the region’s GDP in 2017[3]. 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, organisations using a mix of intermediaries are projected to more than double, and active engagement with industries outside the organisation’s native industry are projected to nearly triple.

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 cases[6] along with an IT maturity model. Adopted in combination, these use cases create a digital-ready infrastructure for today’s businesses:

Network Optimisation to shorten the distance between users and services applications.
Hybrid Multi Cloud 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 interconnect data analytics in proximity to users.