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4 forces driving the re-networking of the digital world

Opinion
Sep 04, 20184 mins
Digital TransformationNetworking

The forces driving digital transformation in the coming decades will lead to enterprises creating more decentralized, private connections so that their businesses can continue to function smoothly.

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In a world with vastly increasing amounts of data and dependency on the Internet, digital transformation is now paramount to the long-term survival of enterprises. But what will digital transformation in the years ahead involve? A crucial component for companies will be ensuring they have enough interconnection bandwidth to handle business demands in the future.

Interconnection bandwidth is the ability to support direct private data exchange across a variety of hubs and interconnection points within a network, bypassing the public Internet. These private connections are important because they offer scalability, security, and direct connections to copartners and service providers that companies cannot get otherwise.

And the demand for interconnection is set to explode. According to the Global Interconnection Index, Volume 1, by 2020 Interconnection Bandwidth will significantly outpace the growth of overall global IP traffic, the internet and MPLS, today’s leading private network model. This vast increase in the use of interconnection will lead to a re-networking of the digital world. There are several forces driving this change, that clearly illustrate that business is now dependent on digital transformation.

1. Rewiring the network for digital transformation

Digital transformation begins with a strong foundation of securing the core infrastructure and making it scalable for the challenges of tomorrow. The world around us is changing so fast – several technologies around 5G, IoT, AI, etc are being piloted today which cannot be implemented at scale without a robust network platform.

2. Moving to the cloud

The 2018 IDG Cloud Computing study showed that organizations continue to increase their investment and evolve their cloud environments. A whopping 73% percent of organizations have at least one application, or a portion of their computing infrastructure already in the cloud and 42% of organizations are already using multi cloud. Multi-cloud use is the only way companies will be able to scale in a way that handles their digital needs, and only private connections support this demand.

3. Hyperconnected supply chain

Supply chain partners will also require increased interconnection bandwidth to thrive, with an estimated usage increase of 73%. Interconnecting to these partners will allow businesses to collaborate digitally.

4. Security

Security remains the most critical vulnerability for all – from CIOs to network administrators. This is one area which takes up the bulk of the IT spending budget. With new technologies around hybrid/multi cloud deployments, widespread adoption of blockchain and regulatory pressure, security needs to be approached with a fresh perspective.

Transformation across industries

These forces will increase Interconnection Bandwidth across a variety of industries. Banking and Insurance, Telecommunications, and Cloud and IT services are the industries that are projected to require the greatest share of Interconnection Bandwidth by 2020.

All these industries will have to re-network their digital infrastructures to ensure they have secure and dependable ways to connect and exchange data. The ascendance of big data, data-driven analytics, and decision-making leaves all industries more dependent on reliable connectivity than ever before. Yet, the result is that companies face the challenge of integrating their physical and digital worlds, which is a massively complex challenge.

How should they start to do this? The traditional method of integration has been to build, deploy, architect, and network all physical and digital platforms in a centralized way. From this centralized system, you could then add extensions out from the core. That design is now inverted. Urbanization, cybersecurity threats, and demands for digitally based global trade are all contributing to an increasing need to connect networks locally, and in a manner that allows you to scale flexibility and securely. You cannot do this over the public Internet.

For enterprises, interconnection is therefore the only logical path forward. Employees are constantly accessing data, applications, and information from different locations and different devices. That variability and unpredictability means that users must be able to access data in a localized way that provides security and the same reliability of the centralized models of the past. The forces driving digital transformation in the coming decades will lead to enterprises creating more decentralized, private connections so that their businesses can continue to function smoothly.

Contributor

Jim Poole is the Vice President for Global Ecosystem Development at Equinix. In this role he explores new and emerging digital ecosystems with a focus on how interconnection can be used to strategic advantage by Equinix customers.

Prior to his current role, Jim served as the Vice President for Global Service Provider Marketing, where he was responsible for vertical strategy, messaging and sales activation. Jim has more than 20 years of experience in the ICT industry, and has held executive-level positions at Roundbox, Savvis, C&W Americas, NTT, dynamicsoft and UUNET.

The opinions expressed in this blog are those of Jim Poole and do not necessarily represent those of IDG Communications, Inc., its parent, subsidiary or affiliated companies.