Interconnection Set To Grow 45% In Next 3 Years

Private Data Exchange Between Businesses Forecasted to Outpace the Public Internet by Nearly 2x in Growth and 6x in Volume by 2020

The bandwidth capacity for privately exchanging data between companies, or Interconnection Bandwidth capacity, is outpacing the growth of the public internet, according to a new market study published by Equinix entitled the “Global Interconnection Index.”

By analyzing the adoption profile of thousands of carrier-neutral co-location data centres, the Index revealed that Interconnection Bandwidth will send six times as much traffic as is sent on the global IP network.

We recently spoke to Equinix Services’ Managing Director, Michael Winterson about the findings.

The Index highlights how companies are finding new ways to connect with their supply chain, partners, and customers, and how infrastructure is responding to increasing demand for real-time data storage, processing and analytics. The Index promises to stand as a valuable tool for businesses, and its value will grow as business models become more digital and distributed.

The Index’s finding revealed that so-called Interconnection Bandwidth can be expected to grow by a 45 percent compound annual growth rate, and, by 2020, the total bandwidth will reach 5,000 Terabytes per second. By comparison, the CAGR of global IP traffic will be a more modest 24 percent, while volume will reach 855 Tbps. The legacy Multiprotocol Label Switching, or MPLS, system will only grow by four percent CAGR during this time frame.

Outlined in the Index were several factors contributing to this growth. The sheer use of digital technology will play a factor, as customers and business entities continue to demand real-time analytics, lower-latency and improved performance. As more than two billion people move to major cities by 2035, there may be up to 50 urban hubs that demand dense interconnection capabilities. Bypassing the public internet also makes it easier to avoid a number of security threats, protecting against ransomware and other potential attacks. The global trade of distributed digitally services is also rising, and demand for digital trade both within and between metropolitan areas will push growth.

The United States has the most Interconnection Bandwidth, and it’s projected to maintain its lead. However, the US also has the most mature network, and other regions will shrink the gap, at least in relative terms, over the coming years, with all other regions growing at a faster pace. London will top the European leaderboard for Interconnection Bandwidth capacity as its expected to grow 44% per annum. The traditional IT deployment model is by far the largest in terms of Interconnection Bandwidth. However, Interconnection to supply chain providers will grow significantly faster, and IT service providers, combined with cloud providers, will grow even faster still.

The Index is the first of its kind; despite the importance of Interconnection Bandwidth, it has never been properly quantified. The Global Interconnection Index provides an overview of progress through 2020, and its detailed data provides valuable insight to help companies hone their global Interconnection strategy going forward. The industry-first approach aims to deliver a top-down view that can be supplemented by more regional information.

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