Subscription-based digital infrastructure to dominate by 2026, says Equinix report
Wed 31 Jan 2024
A significant shift is underway in how enterprises design and manage their digital infrastructure. By 2026, it is predicted that 80% of new enterprise digital infrastructure investment will operate through subscription-based services, according to the latest Global Interconnection Index (GXI) 2024.
This marks a substantial move from traditional capital expenditure models to more flexible operational expenditures.
The Shift to Digital Infrastructure Subscription Models
This trend is driven by the increasing demands of data-dense technologies such as AI, 5G, and edge computing, compelling IT decision-makers to opt for subscription-based models over the long-term purchase of physical equipment like servers, routers, and storage arrays.
Steve Madden, Vice President of Digital Transformation & Segmentation at Equinix, highlights the competitive disadvantage of traditional procurement processes.
“The pace of hardware innovation is increasing, putting pressure on the price-performance ratio and infrastructure efficiency,” said Madden.
This shift towards subscription models offers enterprises the agility to adapt their infrastructure rapidly while accessing the latest technologies.
“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,” added Madden.
Key Insights from GXI 2024
The GXI 2024 report also sheds light on broader trends within the digital economy.
Global interconnection bandwidth is expected to grow at a 34% CAGR, reaching 33,578 terabits per second by 2026.
Organisations are increasingly connecting with 30% more business partners across a wider range of locations. Edge infrastructure is experiencing the highest growth rate, expected to expand at over twice the rate of core infrastructure through 2026.
Elias Khnaser, Chief of Research at EK Media Group, emphasises the importance of subscription models in the current dynamic environment.
“Subscription-based access to thriving ecosystems is the only way organisations can build and scale digital infrastructure capable of supporting business transformation driven by AI, edge, and other technologies,” said Khnaser.
The GXI report, published by Equinix, analyses the digital economy’s evolving landscape, combining Equinix’s interconnection data with market intelligence research to provide an industry-wide forecast up to 2026.