The Equinix Global Interconnection Index (GXI) 2024 predicts that to meet the ever-growing demands of data-dense technologies such as AI, 5G and edge computing, IT decision-makers are increasingly shifting away from long-term purchases of physical equipment, such as servers, routers and storage arrays, in favour of flexible subscription-based models.
This shift from CAPEX to OPEX started with multi-cloud adoption but is now becoming the norm across all infrastructure out to the edge, providing enterprises with greater agility in architecting their infrastructure everywhere while ensuring they have access to the most efficient technologies.
“Industry patterns have shown that the traditional procurement process of buying your IT hardware if that is not your business, is becoming a competitive disadvantage,” said Steve Madden, vice president of digital transformation & segmentation at Equinix.
He opined that the pace of hardware innovation is increasing (especially with GPU technologies), putting pressure on the price-performance ratio and infrastructure efficiency.
“Globally, digital transformation requires businesses to become more agile while adapting to dynamic changes. Subscription models can offer continuous improvement and easier adoption of new technologies already in place,” he added.
Other forecasts and trends
- The digital economy continues to expand: Global interconnection bandwidth is forecast to grow at a 34% five-year compound annual growth rate (CAGR), reaching 33,578 terabits per second (Tbps) by 2026.
- Accelerating the growth of ecosystems: Organizations are connecting with 30% more business partners in twice as many locations.
- Digital proximity drives business at the edge: Edge infrastructure has shown the highest growth rate and is expected to expand at over two times the rate of the core through 2026.
- Greater China sees the fastest-growing interconnection demand: Leading core and edge metros in Greater China maintain their positions at the forefront of growth. Shanghai, with interconnection bandwidth projected to reach a 39% CAGR by 2026, is the world’s fastest-growing core metro. Hong Kong closely follows with a projected CAGR of 37%. Notably, Guangzhou, Shenzhen and Beijing are also forecast to experience substantial growth at a projected CAGR of 42-43% by 2026.
- Enterprise bandwidth growth outstrips service providers: Asia-Pacific currently accounts for 28% of global interconnection bandwidth and is forecast to grow at a 35% CAGR to 9,283 Tbps by 2026. The enterprise sector in the region is forecast to see the fastest growth at a CAGR of 42%, outpacing the growth rates of service providers.
Elias Khanser, chief of research with the EK Media Group notes that in the current dynamic environment, subscription-based access to the thriving ecosystem is the only way organizations will be able to build and scale a digital infrastructure capable of sustaining the business transformation resulting from AI, edge and other technologies.