Swedish companies increasingly using private networks to communicate with ecosystem

Swedish IT leaders are increasingly turning to private networks to communicate with other businesses in their ecosystem

Nearly two-thirds of Swedish IT leaders are increasingly using private networks, rather than the internet, to communicate with partners.

The rise in business done digitally will put a strain on the internet as traffic increases, but private communications networks between companies could help relieve this.

A survey by datacentre company Equinix asked Swedish chief technology officers (CTOs) how they preferred to handle communications with partner companies and clients. A total of 64% said using datacentres as hubs in private networks used to communicate between partners in ecosystems was becoming more important.

Equinix said within a few years, these networks would have more traffic than existing networks running over the internet.

“In Sweden, an unusually large number of companies are dealing with partners and customers outside Sweden. These companies have to get seriously involved in all the matters relating to building and upholding private networks,” said Maria Sundvall, CEO of Equinix in Sweden.

“Their ability to create digital connections directly to business partners in and outside Sweden can determine who will break into the new digital business world and who will not. The traditional networks, such as the internet, will not be sufficient for this growing data exchange,” she said.

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According to Equinix, at least half of the world’s GDP will be digitised by the year 2021.

When it comes to implementing private networks, most Swedish CTOs prefer to work with a local technology partner. More than two-thirds (69%) of survey respondents said it was important to work with a service provider that has offices and staff in Sweden. Three-quarters (76%) of those also valued suppliers that offer environmentally-friendly technology. This was considered very important for 30% of respondents, but less so for almost half.

The Equinix Global Interconnection Index also indicated that direct connections on private networks would soon be the most common method for companies to communicate with partners and clients.

The bandwidth needed by companies will have grown by 2021 to over 8TBps (terabytes per second). The volume will have grown to be about 10 times bigger than believed in past estimates. The growth rate is expected to be 48% each year until 2021, whereas earlier predictions suggested only 26%.

The survey found that moving digital communication and all other digital content to the cloud was an important challenge for 56% of the Swedish CTOs questioned. Other findings in the survey revealed that preventing and recovering from security threats – of which there are many – was the biggest concern for 54% of respondents. Meanwhile, 31% cited regulatory demands, such as complying with the General Data Protection Regulation (GDPR), as a priority.

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