In a significant shift toward digital-first strategies, leading organizations are successfully aligning their business and technology priorities, seamlessly integrating digital infrastructure into their operations and adjacent markets. This transformation is driven by a commitment to staying at the forefront of the digital economy, as businesses recognize the need to adapt to the evolving landscape.
By embracing a digital-first approach and investing in cutting-edge capabilities on a global scale, industry leaders are not only transforming their value proposition but also gaining faster time-to-value by actively participating in digital marketplaces. This includes utilizing specialized services to redesign processes and expand their reach, acknowledging the importance of operational data from the field for real-time decision-making and innovation.
Interconnection emerges as a crucial factor in measuring the expansion of the digital economy. The Global Interconnection Index (GXI) report by Equinix provides valuable insights to businesses, helping them navigate the dynamic digital landscape.
Macro trends set to cause disruption in coming years
- Creating digital presence: Businesses are undergoing a profound transformation by integrating technology into their operations, aiming to electronically deliver value and shift revenue towards digital and digitized services. Projections indicate that, within the next six years, digital technology will constitute 70% of the global economy. Presently, only 48% of organizations identify themselves as fully digital enterprises.
- Digital participation: The ongoing digital transformation is steering conventional B2B collaborations and trade towards digital ecosystems and marketplaces. Various industries are developing unique forms of electronic exchange, prompting organizations to strategically place their infrastructure in areas with high industry ecosystem density. While fast followers currently lack access or a strong digital market position, they are swiftly adapting. By 2025, an estimated 80% of B2B sales interactions between suppliers and buyers will take place in digital channels. Front-runners are positioned to generate over 60% of their revenues from ecosystems.
- Digital proximity: Edge infrastructure is exhibiting the highest growth rate, expanding at more than twice the pace of the core. Service providers are increasingly relocating closer to their users, with nearly half of their locations projected to be at the edge. This shift underscores the importance of proximity in delivering efficient and responsive digital services.
- Sustainability: Market expectations and industry regulations are compelling organizations to prioritize sustainability and showcase accountability. Currently, 50% of CEOs are integrating sustainability into their business models, investing in research and development for sustainable innovation. This commitment reflects a broader societal shift towards environmentally responsible practices within the corporate landscape.
In response to these macro trends, the GXI report makes the following predictions:
- By 2025, 85% of global companies are expected to expand multicloud access across several regions.
- 90% of Fortune 500 companies will become digital providers, both selling and consuming digital services by 2025.
- By 2026, 80% of G2000 companies would become digital leaders, interconnecting with 4+ Hyperscale Providers and 30+ SaaS/business partners on average.
- By 2026, the hardware refresh rates will double, driven by improving price/performance ratios.
- By 2026, composable business will drive 60% of digital growth, surpassing M&A as a primary form of growth.
- 80% of Enterprise digital infrastructure investment will be through a subscription model by 2026.
Strategic steps to evolve in an expanding digital economy
- Design for digital revenue generation: As the emphasis is on more than just digitizing business as usual, thoughtful design is required to harness the full potential of digital revenue streams.
- Invest in organizational strengths: Build capabilities that set the business apart. Strategically commoditize and leverage ecosystems for all other facets of operations.
- Prioritize sustainable partnerships: Choose partners aligned with sustainability goals, ensuring their claims are verifiable and officially quantifiable, fostering a commitment to environmentally responsible practices.
- Extend digital infrastructure to the edge: Discourage investments in fragmented edge infrastructure. Instead, opt for a comprehensive platform that effectively extends the organization’s digital infrastructure to the edge.
- Rethink the core: Evolve from rigid and centralized structures to become adaptable and distributed, aligning the core of operations with the dynamic requirements of the digital age.