The overall interconnection bandwidth, the measure of private connectivity for the transfer of data between organizations, will achieve a 45% compound annual growth rate (CAGR) from 2019 to 2023.
The latest Global Interconnection Index (GXI), an annual market study published by Equinix, shows that the COVID-19 pandemic has already had a dramatic effect on how businesses are planning their digital infrastructure initiatives over the next three years. According to the report, digital service providers, within industries like telecommunications, cloud & IT services, content & digital media and technology providers, are forecast to increase private connectivity bandwidth 5x by 2023, driven by greater demands from enterprises to close digital gaps at the edge.
“As interconnected services, cloud providers, distributed cloud, edge services and SaaS offerings continue to proliferate, the rationale to stay only in a traditional data center 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 center (such as emergency quarantine), is driving new thinking in infrastructure planning,” wrote David Cappuccio, Distinguished VP Analyst, Gartner and Henrique Cecci, Senior Director Analyst, Gartner.
The report also forecasts that overall interconnection bandwidth, the measure of private connectivity for the transfer of data between organizations, will achieve a 45% compound annual growth rate (CAGR) from 2019 to 2023. The expected growth is driven by digital transformation, and specifically by greater demands from enterprises extending their digital infrastructure from centralized locations to distributed edge locations. This comes as businesses scale and support real-time interactions by strategically interconnecting workflows closer to and across people, things, locations, cloud and data.
The GXI provides insight into how growth in interconnection bandwidth is expected to accelerate in different regions of the world between 2019 and 2023:
- Global interconnection bandwidth is forecast to grow by 45% CAGR. By 2023, global installed interconnection bandwidth is expected to reach 16,300+ Tbps.
- North America is expected to grow at a 43% CAGR, with service providers leading the growth, showing over a 4x increase in interconnection bandwidth. The top metros for private connectivity growth in the region are forecasted to be Silicon Valley, Washington D.C., Chicago and New York.
- Europe is forecast to grow at a 45% CAGR, where telecommunications and cloud & IT providers are to contribute to 55% of the total interconnection bandwidth growth, outpacing other industries in the region. Frankfurt, Amsterdam, Paris and London are predicted to be the top metros for interconnection bandwidth growth.
- Asia-Pacific is expected to grow at a 47% CAGR. Cloud & IT Services are to lead the growth in this region, reaching an anticipated 1,374 Tbps by 2023, which is 29% more than the next largest region, North America, in this sector. The GXI Vol.4 anticipates healthcare & life sciences and government & education to see an acceleration in interconnection bandwidth adoption as both industries prioritize digital initiatives such as telehealth and AI. The leading metros for private connectivity within the region are expected to be Singapore, Sydney, Tokyo, Shanghai and Hong Kong.
- Latin America is predicted to grow at a 50% CAGR. Content and digital media is expected to grow at a 5-year CAGR of 62% between 2019 and 2023, making it the highest growth rate of any sector in any region. Buenos Aires, Mexico City, Rio de Janeiro and Sao Paulo are expected to be the top metros in this region for interconnection bandwidth growth.