Interconnection growth both an opportunity and a threat

Posted on November 22, 2017

Interconnection Growth Both An Opportunity And A Threat

California-based data centre giant Equinix recently published its latest Global Interconnection Index, which measures the growth of interconnection bandwidth worldwide.

Interconnection bandwidth is used for direct traffic exchanges via private interconnections among companies. The Index reports current and projected future peak capacity, measured in gigabits per second. This information is based on a sample of thousands of businesses across every region and major metropolitan area worldwide, and all major business sectors.

No standing still

Interconnection bandwidth may be defined as the total capacity to privately and directly exchanged traffic, between a diverse set of counterparties and providers at distributed IT exchange points.

It is growing extremely rapidly, and Equinix predicts this to continue as business models become increasingly distributed and dependent on the real-time engagement of many more users. Equinix warns organisations will have to keep moving towards increasingly dynamic, on-demand, anytime, anywhere interconnection or risk extinction.

Tech research firm Gartner agrees, saying: “The ability to integrate multiple applications, data types and data sources in a secure, predictable, lower-latency fashion will spell the difference between digital business success and failure.’’

Interconnection accelerates digital transformation by:

  • Unlocking the ability to scale multicloud to its full potential
  • Reducing latency and speeding up business interactions
  • Empowering businesses to take operational control of both centralised and distributed digital platforms
  • Reducing cyber-security risk by bypassing the internet and activating local security perimeters.

History

Interconnection originally emerged from the challenge to globally scale the internet. This required the exchange and transfer of traffic between different provider networks across different regions and countries.

Physical infrastructure meeting places, called internet exchanges, were created and hosted inside carrier-neutral colocation data centre campuses.

The voluntary exchange of traffic among providers became known as peering. Over time, peering in carrier-neutral data centre campuses evolved to become IT traffic exchange points. These then catered for all types of machine-to-machine traffic by integrating direct private connections of counterparties, with distributed IT components co-located.

Future trends

The worldwide deployment of interconnection bandwidth is exploding. Equinix says private data exchanges between businesses will grow almost twice as fast as global IP traffic, and 10 times faster than MPLS networks, between 2016 and 2020.

The Index projects that by the year 2020, total interconnection bandwidth used to conduct scalable digital business will total over 5000 Tbps. To put this into context, with this level of bandwidth it would be possible to:

  • Transfer the entire printed content in the US Library of Congress in a third of a second
  • Process nearly 550,000 electronic payments a minute—assuming the average value is $US50
  • Analyse and exchange the DNA sequence of the entire human population in 2.5 hours.


Asia-Pacific

Interconnection bandwidth expansion in the Asia-Pacific region is expected to outpace both the US and the EU by 2020, growing 46 per cent a year to reach 1120+ Tbps of installed capacity, constituting nearly a quarter of interconnection bandwidth worldwide.

This demand has seen Equinix, establish a relationship to connect to Vocus’ new Australia Singapore Cable upon its completion. Equinix customers include Amazon, Google, Microsoft and Oracle.

High-growth sectors

Globally, banking and insurance is one of the major business sectors expected to see rapid growth in interconnection bandwidth capacity by 2020, expanding at 61 per cent a year and reach 955+ Tbps of by 2020. Other high-growth sectors over this period will include telecommunications (27 per cent a year, reaching 825+ Tbps capacity); cloud and IT (39 per cent a year, 820 Tbps);  manufacturing (54 per cent a year, 540 Tbps).

Emerging high-growth sectors include business and professional services; energy; retail, and healthcare—which are expected to grow their use of interconnection bandwidth capacity by more than 66 per cent by 2020.

One step ahead

The Global Interconnection Index provides a measure of how digital business is currently conducted. It then gives companies the forward-looking data they need to measure, predict and stay one step ahead of their own interconnection needs in an increasingly interconnected future. The better the interconnection, the better positioned you are to take advantage of faster peering and lower latency.

To take advantage of interconnection, just ask what your provider’s Autonomous System Number (ASN) is. Providers with a higher connectivity to other ASN Networks will typically offer faster and more effective routing of data to ther networks across the Internet.

Vocus boosts Equinix interconnections

Vocus’s Australia Singapore subsea cable is currently under construction and scheduled to be begin operating in 2018. It will provide a minimum 40Tbps of system capacity between Singapore and Perth, and from there, link to other major Australian cities via the company’s high-speed terrestrial fibre network. It is expected to deliver a 30 per cent reduction in latency between Sydney and Singapore.

Equinix Australia managing director Jeremy Deutsch said the company was looking forward to connecting its Sydney and Melbourne data centres to the ASC.

“ASC will be the first international submarine cable to establish a point of presence connecting via the most direct path to Singapore through our facilities,’’ 

Jeremy Deutsch
Managing Director, Equinix Australia

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