72% of Global Businesses Forge Ahead with Expansions Despite Economic Concerns and Supply Chain Challenges

By STS News Desk On Jul 6, 2022

Equinix Expands Footprint in Mumbai to Address Rising Demand for Digital Infrastructure

Global growth underpinned by significant investment in digital; nearly half of businesses expanding into new markets virtually via the cloud

Businesses 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, by Equinix, Inc., 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 infrastructure.”

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.
Hybrid 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.

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