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London calling for infrastructure as business nets expand four times faster than pre-pandemic

As the new way of working in the post-pandemic arena evolves, research finds digitally mature businesses are hitting the accelerator on digital infrastructure

All businesses know that things have not been the same since the pandemic, but a study from Equinix has quantified just how much the accelerated pace digital transformation caused by the disruption will fuel growth in interconnection bandwidth.

The company’s latest annual Global interconnection index (GXI Vol. 5) tracked interconnection bandwidth across 12 industries and three regions for traditional companies, cloud native, service providers and hyperscale providers.

A market study published by Equinix revealed that overall interconnection bandwidth, what it called a measure of private connectivity for the transfer of data between organisations, is forecast to reach over 21,485 terabits per second (Tbps), or 85 zettabytes, per year by 2024, representing a five-year compound annual growth rate (CAGR) of 44%. This growth, said the survey, is aligned with the increasing demand for the digital infrastructure needed to bring more businesses online, facilitate electronic integration with partners and supply chains, and reach more people in distributed hybrid work environments.

Looking at the likely key regions for bandwidth growth, the study predicted Frankfurt, London, Amsterdam and Paris to be the top locations in Europe for interconnection bandwidth growth by 2024. London, representing the biggest core metro, is expected to grow at a 45% compound annual growth rate (CAGR) year-on-year, contributing 1,735 Tbps by 2024. This bandwidth would be almost three times higher than Paris, more than twice the Tbps of Amsterdam and double that of Frankfurt. Frankfurt is forecast to contribute 878 Tbps, Amsterdam 767 Tbps and Paris 614 Tbps.

This, said Equinix, further cements London’s position as a strategic interconnection hub for digital businesses looking to compete on a global scale, even despite the UK’s departure from the European Union and disruption brought about by the Covid-19 pandemic.

Moreover, London was the leading metro in EMEA for nine out of 12 industries measured, reliant on interconnection. The city was top for cloud and IT services, banking and insurance, securities and trading, and business and professional services. It came second in the remaining three industries, behind Frankfurt and Amsterdam. Manchester was the only other UK city included in the top ranks, appearing once in fourth place for the wholesale and retail segment.

Looking to the structure of the bandwidth, the study also found that close to 30% of enterprise infrastructure globally deployed in carrier-neutral facilities has moved to the edge, in proximity to points of data consumption. Service providers were also expanding at the edge, growing their edge infrastructure twice as fast as their core infrastructure, enabling them to support increasing demand from enterprises.

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The companies that were regarded as global digital leaders were revealed to be interconnecting with 10 times as many partners, enabling them, said Equinix, to “ride the wave of digital transformation” and enjoy best-in-class services from a vast pool of service providers and partners.

Among global vertical industries, the study forecast the financial services sector to deploy more than 50% of enterprise interconnection bandwidth, with manufacturing as the second-largest industry.

Also, on a global basis, Equinix noted that the public sector, healthcare and life sciences, industrial services, and transportation industries are expected to experience the fastest digital infrastructure growth, which is forecast to drive a 48% or more CAGR in interconnection bandwidth from 2020 to 2024 globally.

It added that such industries were previously lagging in interconnection adoption but are now leading in interconnection growth rate as a result of the pandemic. “UK enterprises see the rapid expansion of their digital infrastructure as a key priority in their recovery from the pandemic,” said Equinix UK managing director Russell Poole.

“There is now a real sense of urgency, with companies significantly accelerating their digital transformation to meet the increasing demand for the real-time transfer, storage and processing of data,” he said. “As a result, infrastructure deployment times are reducing from several years to just six months. It is now more critical than ever for UK industries, many of which have been hit hard by the pandemic, to implement a digital-first strategy to improve efficiency and develop new business revenue models that will aid their post-pandemic revival.”

“Companies that have adopted a comprehensive digital strategy as a core business pillar – connecting with and leveraging digital platforms with partners, ecosystems and customers, consistently emerge as disruptive market leaders,” said Courtney Munroe, research vice-president for worldwide telecommunications research at IDC.

“Adopting digital platforms and services is essential to achieve the level of agility and resiliency that is required to outpace and out-innovate the competition.”

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