Why digital infrastructure investment surged in COVID-19

Digital-Infrastructure investment

Digital infrastructure remains core to businesses and enterprises today. However, the pandemic has caused a major shift in working patterns leading to a surge in digital infrastructure investment, reveals the key findings of Equinix annual global study released on Tuesday.

Equinix report takes into account the views of IT decision-makers on the biggest technology trends affecting businesses worldwide and the impact of the COVID-19 pandemic on digital infrastructure plans.

The global survey of 2,600 IT decision-makers from diverse enterprises across 26 countries in the Americas, Asia-Pacific and EMEA regions has some interesting findings.

In Asia-Pacific, the study reveals:

  • 57% of businesses have rearchitected their IT infrastructure to meet new remote and hybrid working demands, with tech budgets increasing to accelerate digital transformation
  • 63% of digital leaders believe there will be long-term changes to where and how people work within their organization
  • More than half (60%) of the companies still intend to expand into new regions, countries or metros, despite the disruption experienced as a result of COVID-19

Accelerated digital transformation and increased budgets
Digitisation and business investment in digital infrastructure have increased following COVID-19. In Asia-Pacific, 46% of the digital leaders surveyed admitted to accelerated digital transformation plans because of the pandemic. While 44% said their budgets have been increased to satisfy the rapid growth in digital demands.

There has also been a major overhaul of IT strategies to meet the challenges emerging from the pandemic. In Asia-Pacific, about two-thirds of digital leaders said they have revised their IT strategy due to COVID-19. While 64% said they want to invest in technology to be more agile post-COVID.

When asked about their organisation’s digital strategy and top priorities, 76% of respondents in Asia-Pacific reported digitizing their IT infrastructure was a top priority. With 61% saying they see interconnection as a key facilitator of digital transformation—up 12% on last year’s results.

Concerns that the pandemic will have put the brakes on companies’ expansion plans—lessened

  • 60% of businesses still have plans to expand into new regions, countries or metros, according to the digital leaders surveyed in Asia-Pacific.
  • Of that 60%, 57% of digital leaders plan to achieve this virtually, rather than by investing in the physical IT infrastructure in-market.

Utilizing interconnection for success

  • 61% of IT leaders said they believe interconnection—the direct and private exchange of data between organisations—will help them to navigate the challenges they face due to COVID-19.
  • Those stating interconnection was key to their organisation’s survival increased to 57%, up from 44% last year.

According to Equinix Asia Pacific President Jeremy Deutsch, during the pandemic, Asia-Pacific has seen demands for interconnection from digital leaders to manage distributed workforce and make the best use of resources.

“This is reflected in the findings of our study with over 60% of IT decision-makers in Asia-Pacific confirming that interconnection will help them to navigate the challenges faced as a result of COVID-19. And 56% believing interconnection can help their business gain competitive advantage within the marketplace,” said Deutsch.

The Global Interconnection Index (GXI) Volume 4, a market study recently published by Equinix. It forecasts that overall interconnection bandwidth—the measure of private connectivity for data transfer between organisations in Asia-Pacific will achieve a 47% compound annual growth rate (CAGR) from 2019 to 2023.

The expected growth is driven by digital transformation, and specifically by greater demands from enterprises extending their digital infrastructure from centralized locations to distributed edge locations.

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