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Equinix: COVID-19 to accelerate digital transformation

Increased demand for private connectivity in the age of COVID-19 is expected to accelerate digital infrastructure transformation

|Oct 14|magazine8 min read

COVID-19 is having a profound impact on the pace of global digital transformations. A new report from data centre operator Equinix has found that the ongoing pandemic is dramatically affecting the ways in which businesses are planning their digital infrastructure strategies. 

Increased commercial emphasis on the digital economy will, the report predicts, cause digital service providers in the telecommunications, cloud and ICT, content and digital media, and technology industries to increase their usage of private connectivity bandwidth five times over by 2023. 

According to Equinix's Global Interconnection Index Volume Four, "The COVID-19 pandemic has forced businesses to transform how they operate, driving extraordinary demand for digital service providers and a need for increased interconnection—private data exchange."

The overall connection bandwidth measuring the amount of data transferred between enterprises is expected to increase at a CAGR of 45% between 2019 and 2023. The increased traffic, Equinix finds, will be driven by ongoing global digital transformation initiatives, which will place greater demands on the data centre industry, as enterprises extend their digital infrastructure from centralised locations to the distributed edge. 

In a report released last month by Gartner, senior analysts David Cappuccio, and Henrique Cecci wrote: "As interconnected services, cloud providers, distributed cloud, edge services and SaaS offerings continue to proliferate, the rationale to stay only in a traditional data centre topology will have limited advantages. This is not an overnight shift, but an evolutionary change in thinking how we deliver services to our customers and to the business. This trend, coupled with the new reality that outside factors might limit physical access to the data centre (such as emergency quarantine), is driving new thinking in infrastructure planning.” 

Latin America and APAC are predicted to experience the highest rates of interconnection bandwidth growth over the period measured by Equinix’s report, with CAGRs of 47% and 50% respectively. 

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Courtesy of Equinix

In Europe, the telecommunications and cloud & IT industries are expected to account for the majority of growth, with Frankfurt, Amsterdam, Paris and London contributing to the majority of the growth. Dublin will likely also play a key role in Europe’s digital evolution, as a new report by Knight Frank and DC Byte identified the Irish capital as one of Europe’s “Gigawatt Markets” in terms of data centre capacity over the next few years. 

Bandwidth expansion in the US is expected to progress at a CAGR of 43%, led primarily by Silicon Valley, Washington DC, Chicago and New York.

Around the world, traditional business verticals are beginning to make more noticeable efforts to digitally transform their IT infrastructures, with the largest gains expected to be in the healthcare, life sciences, government and education sectors. Organisations in these fields are expected to “lead the traditional enterprises in their interconnection growth rate”, largely motivated by these sectors’ adoption of AI and ML technologies, which Equinix predicts will drive a combined CAGR of 47% in interconnection bandwidth from 2019 to 2023.

"Digital leaders have to prepare for post-pandemic recovery by planning and implementing the right digital transformation initiatives now," said Claire Macland, Senior Vice President of Marketing at Equinix

"We believe those that have a foundational infrastructure which helps bring together all the right places, partners and possibilities will gain a business advantage over the long term."

Equinix recently partnered with VMware to develop new solutions for the network edge
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