Current supply chain constraints and geopolitical and economic instabilities are not slowing the pace of digital infrastructure investment for the most connected companies, according to a new report.
The latest Global Interconnection Index (GXI) 2023, an annual market study published by Equinix, found that the most ecosystem-connected businesses — those directly interconnecting with partners to provide their own digital services — have expanded their digital operations more in the past five quarters than in the previous five years. On average, organizations are connecting to three times as many business ecosystem partners and metros, consuming more than twice the amount of interconnection bandwidth.1
As businesses reinvent themselves in the aftermath of the global pandemic, ecosystem density has become a catalyst for digital innovation, which continues to fuel the growth of interconnection bandwidth. According to GXI 2023, global interconnection bandwidth is forecast to reach 27,762+ terabits per second (Tbps) by 2025, representing a five-year compound annual growth rate (CAGR) of 40 percent, equivalent to 110 zettabytes of data exchanged annually, or enough bandwidth to support over 50 million autonomous cars each exchanging over 2,000 terabytes (TB) of data per year. This forecasted growth shows how organizations are rethinking their business to implement future-proof infrastructure on technology platforms.
Toronto was the second largest edge metro in the Americas behind Los Angeles; with a growth rate of 46 percent CAGR; while Montreal was listed as the eighth largest edge metro behind Houston. Toronto was also identified as mature Financial Service hub, showing nearly 20 percent of bandwidth being driven by B2B partner access. By industry, Toronto was also ranked fourth in the Americas for securities and trading; and industrial services.
“In today’s dynamic setting, every business is becoming a digital provider, which requires a new type of digital infrastructure built sustainably around leveraging ecosystems to deliver seamless digital experiences. Those with a digital-first strategy in place, investing in a robust, future-looking business model and interconnecting to rich ecosystems, are prepared to scale, adapt and thrive,” said Steve Madden, Vice President of Digital Transformation & Segmentation at Equinix.
Additional Insights from GXI 2023
Interconnection continues to accelerate in Canada, with Toronto the second largest edge metro in the Americas behind Los Angeles; while Montreal was listed as the eighth largest edge metro. Globally, interconnection bandwidth is forecast to continue growing at over 35 percent CAGR across all regions and major metros through 2025.
Financial sector drives interconnection: Toronto was also identified as a mature Financial Service hub, showing nearly 20 percent of bandwidth being driven by B2B partner access. By industry, Toronto was also ranked fourth in the Americas for securities and trading; and industrial services.
The move to the edge is accelerating: both enterprises and service providers are forecast to interconnect to edge infrastructure 20 percent faster than the core globally.
Businesses are becoming digital providers: GXI 2023 predicts that 90 percent of Fortune 500 companies will become digital providers, both selling and consuming digital services by 2025.
The sustainable road to digitally thrive: All industries are harnessing digital to accelerate ESG objectives, where 64 percent of Canadian IT decision-makers say sustainability is now one of our organization’s most important drivers. GXI 2023 forecasts the Energy & Utility sector to lead in digital growth rate through 2025 as all organizations explore a sustainable approach to build and expand their digital presence.
“As digital transformation strategies continue to accelerate in this digital-first economy, organizations in Canada and abroad are under pressure to invest in digital infrastructure to keep pace,” said Andrew Eppich, Managing Director, Equinix Canada. “Interconnections within Toronto and Montreal have continued to grow since the last Global Interconnection Index, but we’re also seeing a renewed effort to improve interconnection from coast to coast. Equinix remains committed to building Canada’s digital infrastructure; and empowering national and global businesses with the solutions and services to fuel interconnection and growth.”
Industry Perspective on the Global Interconnection Index
Steve White, Program Vice President, Channels & Alliances, IDC. “As companies increasingly adopt digital-first strategies and look for new ways to drive differentiation, the ecosystem plays an even more critical role. Organizations are relying on ecosystems and digital infrastructure as the foundation to sustainably scale and deliver business value. In order to achieve these business outcomes, companies are interconnecting to customers, partners and vendors to accelerate collaboration and co-creation, as well as meet sustainability commitments.”
1 Equinix (Nasdaq: EQIX) is the world’s digital infrastructure company™. Digital leaders harness Equinix’s trusted platform to bring together and interconnect foundational infrastructure at software speed. Equinix enables organizations to access all the right places, partners and possibilities to scale with agility, speed the launch of digital services, deliver world-class experiences and multiply their value, while supporting their sustainability goals.