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Brexit uncertainty aside, UK businesses continue to invest in IT infrastructure

The latest Global Interconnection Index (GXI), an annual market study published by Equinix, predicts private connectivity at the edge will grow by 51 per cent 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 2,450 global senior IT professionals, almost half (48 per cent) 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 per cent) 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 per cent) 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 VP, 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 per cent CAGR) to overtake North America (46 per cent CAGR) in the race to digital growth. Latin America is leading the charge with a 63 per cent CAGR, with Asia-Pacific not far behind (56 per cent CAGR). Expansion plans across the world, according to the survey, tell a slightly different story with 55 per cent of EMEA businesses – and 42 per cent of UK businesses, specifically – planning to expand in to new metros, versus more aggressive expansion plans in other regions (Americas 69 per cent, Asia-Pacific 65 per cent). 6 out of 10 (62 per cent) IT decision-makers globally, and over half (53 per cent) 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 per cent CAGR globally, outpacing other forms of business data exchange. This is due to be even higher for EMEA, with consumption growing at a 67 per cent CAGR, leading enterprises to account for 60 per cent of total interconnection bandwidth in 2022. And, by 2022, London alone will account for over a third (34 per cent) of European traffic, with leading European cities – Frankfurt, London, Amsterdam and Paris – together accounting for almost 78 per cent 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 per cent), network service providers (23 per cent) and cloud service providers (39 per cent).
  • The independent survey found that over a third (34 per cent) 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 per cent) of global IT decision-makers and for 4 out of 10 (39 per cent) 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 per cent) 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 per cent) in EMEA and over a third (34 per cent) globally. To add to this, 6 out of 10 (60per cent) IT decision-makers in the UK are using interconnection to improve security and half (50 per cent) 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 per cent) 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 per cent) 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.

Sachin Gupta, SVP, product management, enterprisenetworking business, Cisco commented: “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.”

With Russell Poole, managing director, UK, Equinix adding:“With Brexit looming, businesses in the UK are continuing to forge ahead with plans to invest in IT infrastructure, as new technologies, such as AI, IoT and the soon-to-be launched 5G network, promise a rapid increase in data being created, consumed and shared. The results of this survey demonstrate almost half (45 per cent) of businesses in the UK are prioritising moving their infrastructure to the digital edge as part of their organisation’s technology strategy, in turn facilitating interconnection between new and existing partners, and customers around the world. Regardless of the potential impact of the UK’s departure from the EU, having a strong digital infrastructure in place, is crucial to the success of a business”.

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