Monday, 24 September 2018 00:19

Sydney’s interconnection bandwidth to quadruple by 2021: report

By By Staff Writers


Sydney is leading the way in the Asia Pacific region with interconnection bandwidth for the city expected to more than quadruple by 2021, representing a compound annual growth rate of 48% from 2017 to 2021 compared to 44% CAGR from 2016 to 2020 as predicted last year.

According to the latest Interconnection Bandwidth Index (GXI) from data centre company Equinix, Sydney continues to remain as “one of the top metros in the region for growth".

Sydney is one of the top four metros in Asia-Pacific along with Singapore, Hong Kong and Tokyo in terms of Interconnection Bandwidth – and the four cities are expected to contribute to 61% of overall Asia-Pacific Interconnection traffic through to 2021.

Equinix reports that Asia-Pacific’s Interconnection Bandwidth is expected to grow at a 51% CAGR to 2,200+ Tbps by 2021, growing much faster than the United States and Europe.

And the GXI also forecasts Interconnection Bandwidth growth by counterparty categories, estimating the Interconnection behaviour of each.

Surpassing all other categories, Interconnection between Enterprises and Cloud and IT Providers in Asia-Pacific is projected to grow exponentially by 99% CAGR through 2021, “supporting businesses building out new digital services and migrating existing workloads to third-party cloud platforms,” Equinix says.  

Within Asia-Pacific, other industries expected to experience solid growth in Interconnection Bandwidth by 2021 include Energy & Utility (83% CAGR), Healthcare & Life Sciences (79% CAGR), Banking & Insurance (79% CAGR), Government and Education (75% CAGR), as well as Business & Professional Services (71% CAGR).

Equinix notes that it continues its commitment to providing Interconnection capabilities in Australia, with a recent US$11 million investment to expand the PE2 International Business Exchange (IBX) data centre in Perth to create an Interconnection hub and gateway to the rest of the Asia-Pacific region, rolling out Equinix Cloud Exchange Fabric inter-metro connectivity in Sydney, Melbourne and Perth - and providing access to the Vocus-owned Australia Singapore Cable in six metros across the country.

Equinix says its global footprint currently spans 200 IBX data centres across 52 markets, with “more than 9,800 of the world’s leading businesses benefiting from the data centre and interconnection services provided”, with the Asia-Pacific region boasting 40 IBX data centres.

And Equinix reveals that global interconnection and width is forecasted to grow by 2021 to 8,200+ Terabits per second (Tbps) of capacity - or the equivalent of 33 Zettabytes (ZB) of data exchange per year, and a “dramatic increase” over the previous year’s projection and 10 times the projected capacity of internet traffic.

 “This second Global Interconnection Index highlights the enormous growth rate of interconnection both locally in Australia and more broadly across the Asia-Pacific region,” says Jeremy Deutsch, Managing Director at Equinix Australia.

“In light of the growth we have recently announced several key initiatives to assist our customers with their Interconnection needs, including our investment in the expansion of the PE2 facility in Perth, which houses the cable landing station for the ASC cable, and our expansion of the cloud exchange fabric between Sydney, Melbourne and Perth,” Deutsch says.

The Equinix index provides significant insight into regional differences in how growth in Interconnection Bandwidth is accelerating in different regions of the world, including the Asia Pacific. Here’s what Equinix says:

Asia-Pacific: Benefiting from rapid urbanisation and increasing concerns around cybersecurity and data compliance, Asia-Pacific is anticipated to grow at a 51% CAGR, contributing more than 27% of Interconnection Bandwidth globally.

United States: As an early adoption market for digital business and the headquarters for the largest number of multinational enterprises, the United States is expected to see 45% CAGR, contributing more than 40% of Interconnection Bandwidth globally.

Europe: A growing number of regulations requiring data compliance is serving as a catalyst of growth for Europe, which is predicted to grow at a 48% CAGR, contributing to 23% of Interconnection Bandwidth globally.

Latin America: Emerging market dynamics and growing digital business adoption positions Latin America for expected 59% CAGR, contributing more than 9% of Interconnection Bandwidth globally.

“Significant macro, technology and regulatory trends are converging to form an unprecedented era of complexity and risk and forcing the integration of physical and digital worlds,” said Sara Baack, Chief Marketing Officer for Equinix Inc.

“The second Volume of the Global Interconnection Index has found that companies are solving their increasing digital requirements by directly connecting to key business partners through Interconnection, as traditional forms of connectivity do not meet the demanding requirements of today’s businesses.”

Equinix reports that some of the key macroeconomic, technology and regulatory trends that have driven Interconnection growth in the past year and will impact its future growth include:

Digital Business Transformation, which drives the need to support real time interactions between people, things, locations, clouds and data to enable value capture. At least 60% of Australia’s GDP will be digitised by 2021, and 85% of Australian organisations will use flexible IT environments with hyper-agile architecture for application development in the same time frame according to industry analyst firm IDC.  

Cybersecurity Risk, which expands Interconnection consumption as firms increasingly shift to private data traffic exchange to bypass the public internet and mitigate against digital threats as data is distributed across a growing number of vulnerability points. Large-scale cybersecurity breaches are one of the most serious risks facing the world today, and the scale of the threat is expanding drastically. Organisations within Asia-Pacific could lose up to a staggering amount of US$1.75 trillion to cyber security incidents – this amount accounts for 7% of the region’s GDP in 2017]. By 2021, the global cost of cybersecurity breaches is projected to reach US$6 trillion.

Business Ecosystems, which are experiencing an increase in mix of customers, partners and employees and require digital ecosystems and Interconnection to scale. By 2021, organisations using a mix of intermediaries are projected to more than double, and active engagement with industries outside the organisation’s native industry are projected to nearly triple.

And according to Equinix, to capture digital value, companies will need to support real time interactions by more strategically interconnecting the workflows across people, things, locations, cloud and data. The second Volume of the GXI identifies four classes of Interconnection use cases along with an IT maturity model. Adopted in combination, these use cases create a digital-ready infrastructure for today’s businesses:

  •     Network Optimisation to shorten the distance between users and services applications.
  •     Hybrid Multicloud to connect and segment traffic between multiple clouds and private infrastructure
  •     Distributed Security to deploy and interconnect security controls at points of digital engagement
  •     Distributed Data to deploy and interconnect data analytics in proximity to users.


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