Where interconnectivity means business and opportunity in the digital economy

• Business leaders are using digital-first strategies to gain an edge over competitors
• Equinix poised to propel Malaysia into the forefront of the global digital economy

It would be a mistake to think of the recent opening of two data centres in Johor and Cyberjaya, Malaysia by Equinix, the world’s digital infrastructure company, as separate operations, or only connected to each other at most.

As it stands, what Equinix has done is to extend a global platform into Malaysia and help connect and accelerate the digital transformation of Malaysian enterprises into becoming more digital first and competitive entities.

With a global ecosystem of over 10,000 enterprises, networks and cloud service providers already operating in and connected to its network of 260+ data centres, 70+ metro areas and in 33 countries spanning six continents, this deep interconnectivity across the globe is helping drive the global digital economy.

It may surprise some to know that this private interconnectivity is not only growing faster than the public internet but has already surpassed it in scale. The seventh edition of the Global Interconnection Index (GXI), an industry wide study published annually by Equinix, predicts that interconnection bandwidth will grow at a compound annual growth rate (CAGR) of 34% over the next five years. In fact, by the end of 2024, it is expected to be 15 times larger than the public internet. Its growth directly reflects the growth of the global digital economy.

The GXI makes clear that business leaders are using digital-first strategies to gain an edge over their competitors, boost revenue and tap into new market opportunities to grow their businesses. In fact, one key data point from the GXI reveals that 80% of B2B sales interactions between suppliers and buyers are expected to occur in digital channels by 2025.

Even if the prediction of these sales interactions falls short, the various data points from the GXI lend credence to a new maxim that is gaining belief. That, in a hyperconnected world, interconnection isn’t optional. Businesses must be interconnected to compete and grow in the digital economy.

First movers and leaders are doing this already. The GXI reveals that businesses are integrating technology to fundamentally change operations and electronically deliver value, shifting revenue to digital and digitized services.  Survey respondents said they believe 70% of the global economy will be made up of digital technology over the next six years (10 years from 2020). Yet only 48% of organizations consider themselves digital businesses today. There’s work to be done.

Keenly aware that supportive public policy can act as a spur to business adoption of digital, therefore accelerating the national digital economy, the Malaysian government introduced the National Digital Economy Blueprint (MyDigital) in Feb 2021. A key anchor of the blueprint was the government's commitment to lead by example in cloud computing with a cloud first strategy to enhance public sector efficiency and drive innovation while targeting to migrate 80% of its data to the hybrid cloud.

With business needs driving digital transformation, not technology, and with the digital economy rapidly expanding its footprint, it is no surprise that the leading companies in the world are not only adopting digital in their transformation but are challenging their Brick & Mortar economy business models and transitioning to becoming digital first entities.

The GXI predicts a significant shift in the business landscape by 2025. According to their forecast, 90% of Fortune 500 companies will evolve into digital providers, both selling and consuming digital services. This transformation isn't confined to tech companies; it extends to traditional brick-and-mortar businesses as well. Major retailers like Walmart, luxury conglomerates such as LVMH, and supermarket chains like Carrefour are all embracing this change.

Despite their physical retail origins, these companies are actively driving digital adoption in their industries and incorporating digital business models into their core operations. This trend highlights a fundamental shift in how businesses, regardless of their traditional focus, are adapting to the modern digital economy.

To be clear, interconnection is not to be confused with digital network connections such as wifi, mobile network connectivity or fibre to one’s home or work. Rather, interconnection refers to the direct, secure and private exchange of data traffic between organizations, bypassing the public internet. The 260+ data centres from Equinix across the world represents a closed, secure and ultra-fast, low latency veritable digital autobahn to facilitate data exchange between enterprises, drive efficiencies and spur innovation.

Malaysia’s Minister of Investment, Trade and Industry, Zafrul Abdul Aziz, recognized this when he hailed the opening of Equinix’s two data centres in Malaysia as being catalysts to strengthen Malaysia’s digital infrastructure and business. “These data centres will provide businesses, particularly domestic SMEs, with seamless connectivity and access to a vast global network, while driving innovation across diverse sectors in Malaysia.”

The business focus of delivering this interconnectivity is best illustrated by the term Equinix coins for its data centres – it calls them International Business Exchanges (IBX), where companies come together to unlock growth opportunities and accelerate their business, their IT and cloud strategies.

As explained by Cheam Tan Inn, managing director of Equinix Malaysia, “these IBX data centres serve as the cornerstone for driving business agility, fostering collaboration and fueling economic prosperity. By providing businesses with unparalleled access to global networks and cutting-edge technology, Equinix is poised to revolutionize the digital landscape and propel Malaysia into the forefront of the global digital economy.”

Already Malaysian companies such as Maxis and TIME have joined Equinix's network ecosystem in Malaysia along with leading global and local network service providers to provide a highly interconnected and secure environment for customers.      

Part of the ecosystem includes companies like Accenture, a leading consulting and professional services firm, that leverage Equinix’s global presence to help businesses integrate technology, optimize their digital ecosystem and shift to digital-first strategies. Accenture Technology’s Managing Director of Cloud and Infrastructure Engineering (CIE), Paragone Loh commented, “As businesses continue to adopt digital models, Equinix works with Accenture enables secure, efficient, and high-performance digital interconnection which helps to reduce costs around leveraging new digital opportunities.”

Overall, Equinix’s emphasis on interconnectivity aligns with their mission to enable businesses to thrive in the digital economy by providing the infrastructure needed for secure, efficient, and high-performance digital interactions. This strategic focus helps businesses reduce costs, improve operational efficiencies, and leverage new digital opportunities. It’s time for Malaysian businesses to tap this advantage.