With Brexit chat flying back and forth across the English Channel, London might be a dirty word, but that hasn’t stopped it from charging ahead of interconnection trends.
Interconnection bandwidth, the movement of data without traversing the public internet, is an aspect of the connectivity industry which has been growing steadily over the last few years without attracting headlines. As more organizations progress in their digital transformation journeys, it could be used a good measure of economic digital activity in a region. According to Equinix, there is little evidence Brexit is having any material impact on business just yet.
Quoting its second annual Global Interconnection Index (GXI), interconnection bandwidth is forecasted to grow to 8,200 Terabits per second (Tbps) of capacity by 2021, the equivalent of 33 Zettabytes (ZB) of data exchange per year, which is projected to be ten times the capacity of internet traffic. This represents a five-year compound annual growth rate (CAGR) of 48%, compared to 26% CAGR of global IP Traffic. Despite many fearing Brexit would isolate the UK from Europe, if the flow of information is taken as one of the measures of economic productivity, things don’t look too bad right now.
Across Europe, London, Amsterdam, Frankfurt and Paris are the fastest growing markets for interconnection bandwidth, with only Amsterdam (57% CAGR) and Frankfurt (58% CAGR) outperforming London (52% CAGR) for projected growth. And while London sits in third for projected growth, it is still the most important market for Equinix on the continent accounting for more than 35% of Europe’s private data exchange growth. It is simply that much bigger than any other region.
“Despite Brexit and political uncertainty in the UK, the GXI reveals that London is projected to show strong growth, accounting for more than 35% of Europe’s Interconnection Bandwidth growth,” said Russell Poole, MD of Equinix’s UK business. “London’s digital acceleration shows that post-Brexit, Interconnection Bandwidth continues to be driven by the secular growth of global data traffic and the massive shift in IT to support this data explosion.”
The growth of the interconnection bandwidth is driven by digital transformation. As more business critical processes become digitized, the need to ensure real-time interactions between people, things, locations, clouds and data, in a secure fashion becomes more important. Using private data traffic exchanges to bypass the public internet and mitigate against digital threats, reducing the number of vulnerability points, is becoming increasingly popular. Despite Brexit looming on the horizon, the GXI claims 64% of decision makers believe the UK is still the best place in Europe to Interconnect with partners, customers, supply chain and cloud service providers, due to the growing data centre industry.
While these statistics are encouraging, at least for those who live in the UK, it ultimately means very little. No-one really knows what the impact of Brexit will actually be until we’ve actually left the union. That said, it is nice to see not everyone is jumping on the fear-mongering band wagon.