Interconnection Will Help Make History in Europe
Equinix’s Global Interconnection Index Projects 4x Interconnection Bandwidth growth in the EU. Eric Schwartz, the company’s EMEA president, explains what this means.
The shared history of Europe and the internet is deep and colorful, including work back in the 1960s at the UK’s National Physical Laboratory to demonstrate (and coin the term) “packet switching,” which was essential to making the internet work.
As the internet has grown, Europe has set global standards for data privacy protections for its users, such as the pending General Data Privacy Regulation in the EU. And with Interconnection Bandwidth projected to soar in Europe, this shared history is only going to get richer.
The Global Interconnection Index, a first-of-its-kind market study published by Equinix, projects that Interconnection Bandwidth capacity in the EU is expected grow at a rate of 44% between 2016 and 2020, outpacing the U.S. The Index estimates that by 2020, Interconnection Bandwidth in Europe will quadruple in size to reach 1,450 Terabits per second (Tbps) of installed capacity, accounting for 29% of Interconnection Bandwidth globally.
The Index says this European growth will be propelled by various trends, industries and use cases and focused in particular metros.
This is critical information in a digital age, when Interconnection is an essential business enabler, and the right Interconnection strategy can help make even the boldest business ambitions a reality.
What’s driving European Interconnection?
Interconnection is defined as direct, private data exchange between businesses. It has become essential as data traffic has exploded globally and companies have come to rely more and more on data transfers and business transactions that take place between servers at distributed IT exchange points.
Traditional IT architectures, in which data traffic is backhauled between remote sites and corporate data centers, are too centralized and inflexible to interconnect dispersed people, locations, clouds and data with the speed and security users need or expect. I
nterconnection brings the parties exchanging data close to each other at the digital edge, where these interactions are actually happening in real time. This is why the demand for high-performance, direct and secure Interconnection is on the rise.
The Index points to various trends spurring Interconnection growth in Europe, including data sovereignty and the need for firms to exchange data with each other in-region. And it cites the evolution of the European public peering model, which is moving toward more private direct connection.
The Index also calls out a variety of use cases and industries that are fueling Interconnection demand, as well as metros where growth will be concentrated and critical. Some highlights include:
- Exceptional growth. The Index predicts that enterprises interconnecting to cloud and IT providers will accelerate at an incredible 165% compound annual growth rate (CAGR) between 2016-2020. This equates to more than 18x growth from 2017. It also further validates that businesses who want to survive in the digital era must have a robust cloud deployment strategy in place.
- Networks in Demand. Interconnecting to network providers is projected to remain far and away the most prominent service provider use case, accounting for 378 Tbps of installed Interconnection Bandwidth capacity by 2020. But it is estimated to be the slowest-growing among the service provider use cases evaluated in the Index. Interconnecting to content providers was tops with a projected 67% compound annual growth rate.
- Banking Strength: Banking and insurance is expected to add 200+ Tbps of Interconnection Bandwidth capacity by 2020, when it reaches 259 Tbps. That’s more than a 6-fold increase, which puts it narrowly behind Telecommunications in total Interconnection Bandwidth capacity
- London Out Front, Frankfurt Rising: London is projected to remain the largest Interconnection market in Europe, with an estimated 486 Tbps of installed Interconnection Bandwidth capacity by 2020. Frankfurt comes next, overtaking Amsterdam with a projected 252 Tbps.
A living tool for a dynamic region
The Index’s unprecedented look at projected Interconnection Bandwidth capacity demand is more than a validation of Interconnection’s growing importance.
It can also give companies in Europe and worldwide important data as they formulate business growth strategies.
For instance, seeing projected Interconnection Bandwidth capacity by region can help companies decide which areas to target for expansion, based on which places are growing the Interconnection capabilities they will need to thrive.