Global Report Predicts, by 2026, 80% of Enterprises Will Design and Run New Digital Infrastructure Using Subscription-Based Services
AI is driving evolution from CAPEX to OPEX; services increasingly replacing physical equipment
REDWOOD CITY, Calif., Jan. 23, 2024 /PRNewswire/ -- By 2026, 80% of new enterprise digital infrastructure investment is forecast to be operated through a subscription-based model, according to the Global Interconnection Index (GXI) 2024 released today.
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GXI 2024 predicts that in order 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 favor of flexible subscription-based models. This shift from CAPEX to OPEX started with multicloud 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 own IT hardware, if that is not your business, is becoming a competitive disadvantage," said Steve Madden, Vice President of Digital Transformation & Segmentation, Equinix. "The pace of hardware innovation is increasing (especially with GPU technologies), putting pressure on 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."
Additional Forecast and Trends from GXI 2024
- 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 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 core through 2026.
- Elias Khnaser, Chief of Research, EK Media Group
"In the current dynamic environment, subscription-based access to 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."
About the GXI
The Global Interconnection Index (GXI) 2024 report, published by Equinix, is a source of insights on interconnection and its increasing impact on digital leaders. The report offers a comprehensive analysis of the digital economy's evolving landscape. The GXI forecast combines Equinix data on interconnection along with market intelligence research to produce an industry-wide forecast. This edition of the GXI provides an estimate for interconnection adoption across all carrier-neutral facilities (including third-party facilities) in 2022 and forecasts growth out to 2026.
- Global Interconnection Index 2024 [report]
- Enterprises Embrace the Future: Subscription-Based Digital Infrastructure [blog]
Equinix (Nasdaq: EQIX) is the world's digital infrastructure company®. Digital leaders harness Equinix's trusted platform to bring together and interconnect foundational infrastructure at software speed. Equinix enables organizations to access all the right places, partners and possibilities to scale with agility, speed the launch of digital services, deliver world-class experiences and multiply their value, while supporting their sustainability goals.
This press release contains forward-looking statements that involve risks and uncertainties. Actual results may differ materially from expectations discussed in such forward-looking statements. Factors that might cause such differences include, but are not limited to, risks to our business and operating results related to the current inflationary environment; foreign currency exchange rate fluctuations; increased costs to procure power and the general volatility in the global energy market; the challenges of acquiring, operating and constructing IBX® and xScale® data centers and developing, deploying and delivering Equinix products and solutions; unanticipated costs or difficulties relating to the integration of companies we have acquired or will acquire into Equinix; a failure to receive significant revenues from customers in recently built out or acquired data centers; failure to complete any financing arrangements contemplated from time to time; competition from existing and new competitors; the ability to generate sufficient cash flow or otherwise obtain funds to repay new or outstanding indebtedness; the loss or decline in business from our key customers; risks related to our taxation as a REIT and other risks described from time to time in Equinix filings with the Securities and Exchange Commission. In particular, see recent and upcoming Equinix quarterly and annual reports filed with the Securities and Exchange Commission, copies of which are available upon request from Equinix. Equinix does not assume any obligation to update the forward-looking information contained in this press release.
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SOURCE Equinix, Inc.
Released January 23, 2024