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August 16, 2017

Exponential data growth raises need for interconnection solution

Private data exchange between businesses begins to outpace the internet and interconnection becomes the building block business need to develop digital platforms.

By April Slattery

The capacity for businesses to exchange private data is outpacing the internet, growing at almost twice the rate and nearly six times the volume of global IP traffic estimated by 2020, according to the Global Interconnection Index.

Interconnection is said to be becoming an essential building block of the global digital economy. The Index highlights how companies are actively translating digital transformation and can create new ways to connect with their customers, partners and supply chains.

By 2020, Interconnection Bandwidth is expected to grow at a 45% CAGR to reach 5,000 Tbps, dwarfing Global IP traffic in growth (24%) and volume (855tbps). Interconnection is also growing faster than Multiprotocol Label Switching by a factor of 10x (45% to 4%). Providing an insight into metropolitan differences, the index looks at how Interconnection is accelerating in various European cities.

Exponential data growth raises need for interconnection solution

London leads the interconnection capacity as big data takes over.

London has an average growth rate of 44% and is expecting to triple its private data exchange from 114 Tbps to 486Tbps, to continue to top the European leader board in terms of Interconnection Bandwidth capacity, despite Brexit. This leaves the British capital significantly leading ahead of Frankfurt, more than double the interconnection bandwidth capacity of Amsterdam and a staggering 75% ahead of Paris.

Russell Poole, Managing Director at Equinix, said: “The survival of the UK’s business industries post-Brexit and the success of the UK’s economy will rely on organisations that adopt an interconnection-first approach as data production grows at a rapid rate. It’s encouraging to see that London will maintain its status as a leading digital economy by 2020.”

Digital technology use, urbanisation, cyber security risk and global trade of digitally deliverable services are all key macroeconomic, technology and regulatory trends impacting interconnection growth.

Based on what business models are already doing, the Index will provide an annual baseline that tracks, measures and forecasts the growth of Interconnection Bandwidth. This will be defined as the total capacity provisioned to privately and directly exchange traffic.

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Banking and insurance segments are forecast to be the largest consumer of Interconnection Bandwidth as digitisation forces these industries to support new customer engagement models. With the need to provide coverage in many new locations and support increasing amounts of connected devise and sensors, telecommunications is expected to be the second largest segment. The third being cloud and IT services, because of critical building blocks it provides for digital enablement.

Poole said: “UK business and industrial sectors are being disrupted in ways we could not have previously imagined. As the public internet has continued to expand, it has impacted how organisations do business and created opportunities for some of the greatest innovations of this era. This innovation, also described as the Internet of Things has resulted in an unexpected explosion of data which businesses are struggling to analyse and process by relying on the public internet.”

The index analysed the adoption profile of thousands of carrier-neutral colocation data centre providers and ecosystem participants globally.

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