Private Connectivity at the Edge to Grow by Over 50 Percent Annually across EMEA

REDWOOD CITY, Calif. – October 15, 2019 – The latest Global Interconnection Index (GXI), an annual market study published by Equinix, predicts 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. This is enough to support every person on earth simultaneously downloading a complete season of Game of Thrones in ultra-high definition resolution in less than a single day.

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 100 Swiss senior IT professionals, half (50%) of Swiss IT decision-makers think the technology sector will benefit the most from interconnection over the next five years. Across the whole of EMEA, four in 10 IT decision-makers believe interconnection to be a key facilitator of digital transformation.

“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 analyzed in these new locations is contributing to a major shift away from deploying IT in traditional corporate data centers. Enterprises need access to robust, modern data center 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 EMEA 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 planning to expand in to new metros, versus more aggressive expansion plans in other regions (Americas 69%, Asia-Pacific 65%). 6 out of 10 (62%) IT decision-makers globally 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.

• 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 EMEA are utilizing interconnection to connect to other enterprises (25%), network service providers (31%) and cloud service providers (26%).
• The independent survey found nearly half (46%) of global IT decision-makers believe interconnection can help their business to gain competitive advantage within the marketplace. This assertion was true for 4 out of 10 (39%) IT decision-makers in EMEA.
• In Switzerland almost two-thirds (63%) of IT decision makers use interconnection to connect to IT and Telecoms enterprises, a third use interconnection to connect to financial companies and 17% to connect to manufacturing enterprises.

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, more than one-third (34%) of global IT decision-makers (and 31% across EMEA) are using interconnection to increase speed of connectivity.
• Nearly one-third (32%) of Swiss IT decision-makers think Switzerland is the best place in EMEA to interconnect with partners, customers, supply chain and cloud service providers.
• 3 out of 10 (31%) of Swiss respondents to the survey think interconnection can help their business gain competitive advantage within the marketplace.

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, optimizing the performance of networks is a key priority for over half (54%) of IT decision-makers across EMEA. 
• 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 almost half (45%) of global IT decision-makers.
• 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.

Quotes:

• Sachin Gupta, Senior Vice President, Product Management, Enterprise Networking Business, Cisco
  “As enterprises embrace the imperative of digital transformation, they increasingly adopt multiple cloud-based applications to meet their objectives. This places pressure on the network to deliver a fast and secure application experience to users located anywhere in the world. With both applications and networks becoming more distributed, enterprises today will continue to require a low-latency, interconnected architecture to securely connect end users with business-critical applications.”

• Eugene Bergen Henegouwen, President, EMEA, Equinix
  “Europe’s predicted CAGR of 51%, illustrates the fact that enterprises across the continent are increasingly using new and innovative ways of interconnecting with their customers and partners, to stay relevant and gain a competitive advantage. In line with this, results from our independent survey found the EMEA region has the largest proportion of organisations – at 63% – using interconnection to support their expansion into new regions, countries or metros. This shows interconnection is a critical business asset for companies increasingly looking to operate across borders and in doing so, broaden customer bases”. 

• Roger Semprini, Managing Director Equinix Switzerland:
  “Nearly a third of IT leaders here think Switzerland is the best place in EMEA to interconnect with partners, customers, supply chain and cloud service providers. This gives us great momentum as a nation, with Switzerland continuing to evolve in its central European position as the perfect location for interconnection. We are proud to help our customers take advantage of this opportunity and continue to thrive in their digital transformation.”

About the Global Interconnection Index (GXI)
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. The Global Interconnection Index is the industry’s only market study that projects how interconnection bandwidth growth will unfold through 2022. 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) to form a weighted demand multiplier to assist in predicting growth and assess impact on digital business transformation. A detailed methodology description is included in the Global Interconnection Index.

About the Equinix independent survey
As part of a separate independent study commissioned by Equinix, APCO Insight surveyed 2,485 IT decision-makers from a diverse enterprise set across North America, Latin America, Europe and Asia-Pacific. 1,348 of those surveyed are based in EMEA, with 104 being based in Switzerland. Respondents were selected for participation from Dynata’s online panel. The survey was conducted online between August 1-16, 2019.

Additional Resources 

• Global Interconnection Index Volume 3 [report]
• Forrester Total Economic Impact Study (TEI)  [analyst report]
• Gartner Exploring the Edge: 12 Frontiers of Edge Computing [analyst report]
• Gartner: Infrastructure is everywhere [analyst report]
• Taking Digital Business to the Edge [Equinix blog]

About Equinix
Equinix, Inc. (Nasdaq: EQIX) connects the world's leading businesses to their customers, employees and partners inside the most-interconnected data centers. On this global platform for digital business, companies come together across more than 50 markets on five continents to reach everywhere, interconnect everyone and integrate everything they need to create their digital futures. 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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