The Global Interconnection Index and what it means for data centres

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The Global Interconnection Index and what it means for data centres

It’s official: Private data exchange via interconnection will exceed public internet traffic by 2020.

That’s according to a new report from the world’s largest IBX data centre and colocation provider. Equinix’s latest Global Interconnection Index finds the capacity for business-to-business bandwidth is growing nearly double the rate of the public internet, and 6 times the volume of IP traffic worldwide.

What is interconnection and why is it important?

Equinix defines interconnection as ‘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’. In other words, a robust and reliable network where businesses connect directly to each other in order to provide services. As the world’s economies continue to become ever more reliant on digital technologies, these ecosystems are set to grow in importance.

There are 5 trends found to be key to the growth in interconnection:

  • Digital technology usage
    The growth in demand for real-time interactions, a key part of doing business online. There’s also a rise in applications which rely on being able to interconnect disparate elements – for example location-based, cloud computing, and data services
  • Urbanisation
    Populations continue to migrate to the cities (2 billion extra by 2045). This is driving demand for smart cities, which rely on interconnectivity to function correctly
  • Cybersecurity risks
    Organisations relying on conducting business online simply can’t afford to fall victim to hacking. Interconnectivity offers ways to avoid the risks of handling sensitive data via the public internet
  • Global trade of digitally deliverable services
    Interconnectivity is central to enabling these services, which are said to have doubled during the past decade
  • Data sovereignty
    In the face of unprecedented demand for transformative technology, IT leaders must balance concerns around security, privacy and compliance

The report uses predictive analytics to forecast capacity for interconnection, based on analysis of the worldwide colocation market. Overall interconnection is growing at a 45% Compound Annual Growth Rate, reaching 5,000 Terabits per second. Regional growth is split into the following:

  • 36% will come from the United States
  • 29% Europe
  • 22% Asia Pacific
  • 13% Latin America

Asia Pacific

The second-fastest growing region (after Latin America), APAC is expected to see 46% interconnectivity growth per year until 2020, reaching 1,120 Terabits of installed capacity. Hong Kong will grow at 51%, which will put it #1 within APAC, ahead of Singapore and Sydney.

Size matters

What’s more, demand for interconnectivity is found to be from companies across industries. The report also finds that a direct correlation between size and interconnections used. The larger the organisation (revenue, geography and number of employees), the more interconnections needed. Data centres, and enterprise IT architecture, must transform to meet this demand, while supporting worldwide digital transformation.

In today’s disruptive era, where new technology is driving digital transformation at breakneck speed, interconnectivity is a necessity. Bypassing the public internet, avoiding bottlenecks and keeping services running in real-time and on-demand. With software-defined networking for cloud-enabled scaling.

Ultimately it’s a case of ‘scale or fail’, according to Equinix CMO Sara Baack. “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.”