Enterprises will need more bandwidth than public internet

Private data exchange capacity between enterprises is fast outpacing growth of data traffic on the public internet, and looks set to comprise nearly six times the volume of global internet protocol (IP) traffic by the end of the decade, according to a new study produced by Equinix.

In its Global Interconnection Index study, Equinix found that private interconnection bandwidth looked likely to increase at a compound annual growth rate (CAGR) of 45% to hit 5,000TBps by 2020, compared to 855TBps of IP traffic on the public internet over the same timeframe.

“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,” said Equinix UK MD Russell Poole.

“This innovation, also described as the internet of things [IoT], has resulted in an unexpected explosion of data which businesses are struggling to analyse and process by relying on the public internet.”

This is the first edition of what Equinix plans to be an annual report that will provide an annual baseline to track, measure and forecast the growth of interconnection bandwidth in order to show how companies action their digital transformation and change how they connect with customers and partners.

There are a number of economic and technology trends that are driving this growth, which include increased use of digital technology, cyber security risk, trade in digitally deliverable services, and urbanisation.

The largest use case for interconnection bandwidth over the next three years will be associated with traditional IT models where businesses connect to network providers as a means to reach their partners and customers. However, bandwidth for connections into cloud and service providers is rapidly catching up.

“Enterprise connectivity is undergoing a major transformation as applications and data move to the cloud, and hybrid environments in which on-premise and cloud presences coexist, are becoming the norm,” said Colt Technology Services chief technology officer Rajiv Datta.

“Such environments drive the need for significant high bandwidth interconnection not just between enterprise locations, but also to the cloud service providers and hybrid colocation presences that are geographically dispersed but are vital in driving application performance and, ultimately, user experience.”

The inaugural report also contained some good news for datacentre operators in the UK, forecasting that London would remain top of the pile in terms of capacity – tripling from 114TBps to 486TBps in spite of Brexit – with a substantial lead over its nearest rivals Amsterdam and Frankfurt.

“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,” said Poole.