Businesses Forge Ahead with
July 7, 2022
around the world are planning major investments in digital technologies to
support ambitious expansion plans following lessons learned from the pandemic.
New findings from an annual survey of technology decision-makers suggest a
movement toward a less connected world could not be further from the plans of
digital leaders across industries and geographies. Despite concerns of a
potential looming recession and talk at the World Economic Forum in Davos about
the end of globalization, businesses appear to remain bullish about their plans
for further global expansion.
Of the 2,900 IT decision-makers surveyed globally in the Equinix 2022 Global
Tech Trends Survey, 72% of respondents indicated their organization is planning
to expand in the next 12 months, into either a new city (31%), a new country
(33%), or a new region entirely (38%).
IT leaders in APAC were particularly confident about global expansion: 82% said
their business had plans to expand into new markets, only slightly more than in
the Americas at 78%. Perhaps reflecting more caution around economic factors,
tech decision-makers in EMEA were less ambitious in terms of expansion plans,
with 59% planning to expand into a new market in the next year.
A number of potentially limiting factors were identified by businesses when it
came to global growth, with supply chain challenges highlighted as a particular
area of concern. 59% said their business was plagued by global supply chain
issues and shortages, while 58% specified the global microchip shortage as a
threat to their business.
These continued supply chain issues appear to be driving a need for more
virtualization, with growth aspirations underpinned by significant planned
investment in digital infrastructure. Almost half (47%) of respondents said they
plan to facilitate global expansion plans by deploying virtually via the cloud,
with over a quarter (26%) doing so using a bare metal solution. Meanwhile, 47%
globally said they expect increased spending on carrier-neutral colocation
solutions to facilitate the planned rise in digital deployments, while even more
(59%) said they intend to increase investment in interconnection services as
they plan to progress digital transformation and build resilience.
The pandemic also continues to have a significant impact on businesses' digital
strategies. More than half of global IT leaders (52%) say they are accelerating
their company's digital evolution because of the COVID-19 crisis. Indeed, over
half (54%) confirm their IT budgets have increased as a direct outcome of its
legacy—an insight into the now broadly acknowledged necessity for robust digital
infrastructure to pivot to evolving business needs in an instant. Furthermore,
the majority of respondents (61%) believe the technology changes and investments
implemented during the pandemic are here to stay.
According to Karl Strohmeyer, Chief Customer Officer at Equinix, "In recent
years, bold global expansion could have been seen as too risky or too dependent
on capital investment in physical infrastructure. Now, things have changed. The
pandemic has accelerated growth and innovation, with more than half of our
respondents saying COVID-19 advanced their company's digital evolution."
Strohmeyer explains, "There are huge opportunities for businesses to
successfully expand into new markets and reach new customers. Using new digital
models, companies can deploy in new markets at relatively low cost and without
sacrificing resiliency. The survey reveals digital leaders believe they can
facilitate ambitious business expansion across economic cycles—and having a
robust digital infrastructure and access to a rapidly improving pool of advanced
technologies is a source of that confidence."
There remain, however, significant concerns around cybersecurity. Ensuring
expansions are supported by resilient digital models is business-critical,
particularly at a time of increasing volatility and emerging global threats. As
part of their digital-first strategies, 85% of respondents confirmed a key
priority is improving cybersecurity. 84% said complying with local market data
regulations is critical, while 83% highlighted the need to futureproof their
businesses. According to IT specialists, the most feared threats were
cyberattacks, security breaches and data leaks (all 70%).
Rick Villars, Group Vice President for Worldwide Research at IDC noted: "Even as
enterprises seek to navigate the waves of disruptions associated with inflation,
supply chain disruptions, and unmet skills needs that arose in the first half of
2022, IDC consistently hears from IT leaders that timely and expansive access to
innovative technology, interconnectivity, and intelligent SaaS resources is
critical. Companies like Equinix, that can speed access to needed facilities and
connectivity options while also enabling more effective use of hybrid and
multicloud services, will play a vital role in helping IT teams make sustainable
technology investment decisions and take full advantage of SaaS and digital
In addition, the survey revealed:
Customer and employee experience prioritized: Recognizing digital adoption
affects end users, 83% of IT leaders said enhancing customer experience was a
priority. Companies also acknowledged improving employee experience is critical
to their transformation journey and retention of talent, with 81% citing this.
Cloud migration continues: 71% of global
IT leaders said they plan to move more business functions to the cloud. Of those
respondents, half plan to move more of their business-critical applications to
the cloud, and almost half (49%) intend to move security functions to the cloud.
cloud dominates: Hybrid cloud models were the preferred approach for 38% of
respondents, but almost a quarter (22%) of digital leaders globally still rely
on a single cloud provider or none at all. Interconnection may step in to help
here, with 35% of respondents believing it increases flexibility of
connectivity, and 30% reporting they use it to enable hybrid multicloud.
Investing in innovation: Many IT leaders
are looking to futureproof their businesses and take full advantage of evolving
technologies, such as 5G, the internet of things (IoT), and Web3. 71% of
respondents said they are moving to an everything as a service (XaaS) model,
citing the simplification of IT infrastructure (65%), flexibility (56%) and
improved user experience (54%) as the key reasons for doing so.
Focusing on sustainability: While
innovating, digital leaders are keeping a close eye on the sustainability of
their IT infrastructure. 67% say they are measuring and actively trying to limit
the environmental impact of their IT equipment, and 65% will only work with IT
partners who can meet key carbon reduction targets. Indeed, 69% report
sustainability is now one of their organization's most important drivers with
commitments made to science-based targets.