Private Connectivity Between Businesses to Grow to Nearly 10x the Internet, According to 2nd Annual Global Interconnection Index

REDWOOD CITY, Calif., Sept. 18, 2018 /PRNewswire/ -- Digital transformation is accelerating for every company in every industry, everywhere around the world. As a part of this necessary transition, people, software and machines are creating and consuming data faster and in more distributed locations than ever before, creating dissonance and driving businesses to private and direct Interconnection to solve their complex integration challenges.

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According to the second annual Global Interconnection Index (the "GXI"), a market study published by Equinix that analyzes traffic exchange globally, Interconnection, or direct and private traffic exchange between key business partners, is becoming the defacto method for companies to operate in today's digital world. Interconnection Bandwidth provisioned for this purpose 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, a dramatic increase over the previous year's projection and ten times the projected capacity of internet traffic(1). This represents a significant five-year compound annual growth rate (CAGR) of 48%, almost double the expected 26% CAGR of global IP Traffic.

"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."

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 50% of global GDP will be
        digitized by 2021, with growth in every industry driven by digitally
        enhanced offerings, operations and relationships(2).

    --  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. By
        2021, the global cost of cybersecurity breaches is projected to reach
        US$6 trillion(3).
    --  Business Ecosystems, which are experiencing an increase in mix of
        customers, partners and employees and require digital ecosystems and
        Interconnection to scale. By 2021, organizations using a mix of
        intermediaries are projected to more than double, and active engagement
        with industries outside the organization's native industry are projected
        to nearly triple(4).

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(5) along with an IT maturity model. Adopted in combination, these use cases create a digital-ready infrastructure for today's businesses:

-- Network Optimization 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 interonnect data analytics in proximity to users.

Highlights/Key Facts

    --  The GXI provides significant insight into regional differences in how
        growth in Interconnection Bandwidth is accelerating in different regions
        of the world.
        --  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 compound growth of
            45% per annum, 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 48% per annum, contributing to 23% of Interconnection Bandwidth
        --  Asia-Pacific: Benefiting from rapid urbanization and home to many of
            the largest digital content providers, Asia-Pacific is anticipated
            to grow 51% per annum, contributing more than 27% of Interconnection
            Bandwidth globally.

        --  Latin America:  Emerging market dynamics and growing digital
            business adoption positions Latin America for expected 59% per annum
            growth, contributing more than 9% of Interconnection Bandwidth
    --  The GXI also forecasts Interconnection Bandwidth growth by counterparty
        categories, estimating the Interconnection behavior of each. Surpassing
        all other categories, Interconnection between Enterprises and Cloud and
        IT Providers is projected to grow 98% per annum through 2021, supporting
        businesses building out new digital services and migrating existing
        workloads to third-party cloud platforms.

Industry Perspectives on the Global Interconnection Index

    --  Matt Douglas, Chief Enterprise Architect at Sentara Healthcare"We see a
        huge transformation in the healthcare industry, particularly when it
        comes to securely managing data. Enabling flexible and efficient
        connectivity across our enterprise, the internet and cloud providers
        allows us to efficiently capture, analyze and distribute data from many
        disparate sources. It provides a key strategic advantage in scaling our
        business and creating value for our customers. We view Interconnection
        as a fundamental building block of IT infrastructure today."

    --  David Hicks, Vice President of WW, ISV, OEM and Java Business
        Development at Oracle"As enterprises increasingly adopt hybrid cloud
        architectures to accelerate their digital transformation initiatives,
        Interconnection is a proven design strategy for reaching cloud services
        such as Oracle Cloud Infrastructure in an efficient manner. Direct and
        private interconnection to Oracle Cloud Infrastructure FastConnect
        network connectivity platform helps provide predictable and consistent
        performance, isolation and availability."

    --  Tom Fountain, EVP and Chief Strategy Officer at F5"As enterprises
        realize the value of their application capital and adopt multi-cloud
        architectures as part of their digital transformation, interconnection
        designs provide an efficient and secure way to leverage cloud services."

    --  Eric Hanselman, Chief Analyst at 451 Research "As enterprises chart
        their paths to greater digitization, they seek pathways that avoid the
        turbulence generated by the growing complexity of integrating various
        digital services. New architectures anchored by Interconnection smooth
        this complexity and, increasingly, enterprises are finding that they
        also yield improvements in security, performance and capacity. Equinix's
        Global Interconnection Index provides useful insight into these digital
        trends including why businesses are directly connecting with strategic
        partners to build their digital business ecosystems."

About The Global Interconnection Index

The Global Interconnection Index, published annually by Equinix, delivers insights that drive digital business advantage by tracking, measuring and forecasting growth in Interconnection Bandwidth--the total capacity provisioned to privately and directly exchange traffic with a diverse set of counterparties and providers at distributed IT exchange points. As crucial as Interconnection is to how digital business is conducted, it has never been quantified. The Global Interconnection Index changes this with industry-first projections of how Interconnection growth and access will unfold through 2021. The report serves as a market baseline that analyzes the deployment profile of thousands of ecosystem participants using carrier-neutral colocation data center providers globally. This data was combined with local and regional market data (including macroeconomic trends, market demographics and industry concentrations), and with key demand drivers of digital business, to form a weighted demand multiplier to assist in predicting growth to factor the impact of digital business transformation. A detailed methodology description is included in the Global Interconnection Index.

Additional Resources

    --  Interconnection Strategy Guide
    --  Global Interconnection Index Infographic
    --  Colocation-Based Interconnection Will Serve as the 'Glue' for Advanced
        Digital Business Applications [Gartner Report]
    --  Interconnection 201: Blueprints for the Interconnected Enterprise [451
        Research Report]
    -- [Interconnection Oriented Architecture Knowledge Base]


    1. Cisco - "Visual Networking Index", 2017
    2. IDC FutureScape: Worldwide IT Industry 2018
    3. Cybersecurity regained: preparing to face cyber attacks, EY, 2017
    4. Capitalizing on Your Business Ecosystems Economy: Gartner, 2017
    5. The four classes of Interconnection use cases were developed by analyzing
       more than 1,800 industry implementations worldwide, are documented in the
       IOA(®) Knowledge Base, and have been validated by IT practitioners and
       industry experts.

About Equinix
Equinix, Inc. (Nasdaq: EQIX) connects the world's leading businesses to their customers, employees and partners inside the most-interconnected data centers. In 52 markets worldwide, Equinix is where companies come together to realize new opportunities and accelerate their business, IT and cloud strategies.

Forward-Looking Statements
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, the challenges of acquiring, operating and constructing IBX data centers and developing, deploying and delivering Equinix services; unanticipated costs or difficulties relating to the integration of companies we have acquired or will acquire into Equinix; a failure to receive significant revenue 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; and other risks described from time to time in Equinix filings with the Securities and Exchange Commission. In particular, see recent 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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