As cloud adoption and digital strategies take off, more enterprises are looking to take control of their connectivity. Their ICT ecosystems are increasingly complex and they’re exploring new models for connecting their SaaS platforms or cloud-based applications efficiently and reliably.
Although no two enterprises are the same, they’re seeing networking models that once served the needs of the legacy on-premises world no longer match the needs or expectations of digitally-enabled and cloud-centric systems and operations.
Gartner forecasts worldwide end-user spending on public cloud services to grow 20.7% to total $591.8 billion in 2023, up from $490.3 billion in 2022. Within this total, SaaS is predicted to reach $195.2 billion in the same year.
This level of cloud and SaaS adoption is driving enterprises to be increasingly networking savvy as agility, security, resilience and reliability in networking becomes crucial for supporting operations and meeting business objectives. They are becoming more aware of their changing connectivity needs and the growing role of networking in enabling digital strategies.
There are also more enterprises than ever before operating on a global scale beyond their traditional borders, with staff operating with “work from anywhere” models. Enterprises have to take control of how services are accessed and the network performance that they can deliver.
There is an opportunity for enterprises to add interconnection services to their networking strategies and directly connect with key networks, cloud service providers, and a range of players in a single ecosystem. Internet Exchanges (IXs) play a crucial role in enabling enterprises to deliver new levels of performance and adapt to changing demand, especially as digital strategies ramp up and digital transformation becomes a priority.
Networking Hurdles
When applications and services are no longer hosted on-premises, networking becomes even more critical.
The network infrastructure is the enabler of cloud and SaaS applications, so if the underlying network is underperforming, the applications will be too. This has a direct impact on user experiences, which in turn, can directly impact business operations, productivity, brand trust, and even sales if long periods of downtime are experienced. These risks are too large for enterprises in today’s diverse IT ecosystem to overlook.
However, another wave of challenges arise when trying to minimise these risks. Many enterprises don’t have the technical know-how to upgrade their existing legacy networks, and even for those that do, infrastructure expansion can come with a hefty price tag.
These rigid legacy networks make it challenging for enterprises to scale globally and adapt to fast-moving market demands.
Enterprises need a new way to connect across the globe to stay competitive and enhance online experiences for both their internal and external stakeholders.
Empowering Enterprises with Peering
IXs are often believed to be locations where only telecommunications companies interconnect and exchange data, however this is no longer the case. We’re seeing an increasing number of enterprises across multiple industries peering at IXs to take their connectivity to the next level as they adopt more cloud and SaaS solutions.
Early adopters include companies from the financial services sector like banks, for example, who naturally had a higher degree of networking maturity due to data stringency and the need to keep everything in-house. This meant their internal teams had a better idea about interconnectivity, and the difference that joining an IX could make.
We’re now seeing this across many other enterprise verticals, particularly large multinationals across sectors looking for a simple way to scale globally. However, it’s more about where the enterprise is on its digital journey, rather than the size.
Enterprises don’t need to be tech experts to join IXs – it’s much more straightforward than most think, and can unlock a wide range of benefits to improve performance, control and costs:
- One Connection, Multiple Solutions – At an IX, enterprises can benefit from multiple interconnection services and opportunities such as cloud access, peering with access networks, and more.
- Global Reach – Peering at an IX enables enterprises to interconnect globally, without the need for a physical presence at the exchange point. This makes it easy to scale to new markets and gain a truly global footprint, without needing to set up physical infrastructure.
- Cost Effective – Joining an IX can be more cost-effective than growing an enterprise’s physical infrastructure across the globe.
- Network Resilience – IXs provide enterprises with the opportunity to re-route traffic in the event of a network interruption or failure, helping to maintain acceptable service levels.
- High Performance – Peering provides the most direct route between networks, which reduces the distance that the data travels. This results in a superior user experience thanks to keeping the traffic closer to the end user, and having less hops along the way.
- Gain Control – Enterprises can improve network control and performance by deciding what route their traffic should take.
- Secure and Redundant – Enterprises can monitor their data’s journey end-to-end and minimise the risk of security threats along the way. Network redundancy can also be improved by selecting optimal routes and being present at multiple IXs.
A Future of Opportunity
The relationship between enterprises and IXs has really developed in recent years, and there’s a huge opportunity there for enterprises who are willing to take it.
Enterprises need to get themselves out there and talk to IXs to better understand how to get started and learn more about interconnectivity. They are increasingly wanting to help enterprises remove the barriers from growth and experience digital transformation.
They can work together to support enterprises on their digital journey, which goes beyond just the pure technical aspects, but also involves education, training, and a deeper understanding of how IXs can help them flourish.
A key takeaway is that IXs are not limited to telecoms businesses – any enterprise across any sector can benefit from peering and the wider ecosystem of partners and solutions than comes with it.
There is a huge opportunity in exploring how these partnerships can support new digital strategies as cloud-based applications and services continue to grow globally.
Give it a go. There’s so much value that can be added to enterprise networks by peering and partnering with experts across the globe. Enterprises just need to take the plunge and explore what the world has to offer.
Author: Kurtis Lindqvist | CEO, The London Internet Exchange (LINX)
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