5 IT Predictions for Digital Business in 2019 | InterConnections - The Equinix Blog 4/1/19, 11'26 am

5 IT Predictions for Digital

Business in 2019
November 12, 2018

While digital transformation has the potential to dramatically accelerate

long-term business performance, the truth is that we are deep into the
digital awkward years. Though the promise of digital is full of new
possibilities, most companies are currently experiencing the growing pains
of hybrid IT complexity.

Today’s businesses see digital technologies that need to be seamlessly

integrated with legacy IT infrastructures to optimize business processes,
agility and scale. They anticipate an increasing number of connected-
devices at the edge generating mountains of data that will expand their
organization’s threat landscape, while data security and compliance
requirements continue to increase.

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At Equinix, we have a unique perspective on these dynamics and a special

view into what’s coming next. For more than 20 years we have listened
closely to our customers’ digital challenges and dreams and innovated to
solve and enable them. Today this track record has put us front and center
in the digital journeys of nearly 10,000 customers all over the world, as
enterprises and service providers tap into the power of our business and IT
ecosystems and build their digital-ready infrastructures on our global
interconnection platform.

We are working with our customers around the globe to build the data
center of the future, blazing the trail for next-generation interconnection
and innovation, including emerging security, data and application
infrastructure services. And as business and technology leaders move
closer to another year of high stakes digital transformations and the big IT
decisions that power them, we’re taking a closer look at the technologies
that will make the biggest digital business impact in 2019.

Prediction #1: Paving a Path to the Promise of 5G

Tomorrow’s high-speed wireless networks will accelerate today’s network
transformation

Nearly every industry has the potential to benefit from the endless
possibilities of 5G, the next evolution of wireless network architectures. 5G
is not only about faster data connections and better online experiences, it’s
about rethinking what’s possible. Futuristic visions of smart cities,
driverless cars and remote, robotic surgeries suddenly seem within reach.

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McKinsey doesn’t expect large-scale 5G deployment until early 2020. First,

enterprises must tackle the network transformation that 5G requires.
[i]This includes creating infrastructures at the edge that can truly leverage
5G’s fiber-like speeds and handle latency-sensitive applications
consistently and reliably. Existing mobile networks will need to be re-
architected and rebuilt throughout the enterprise.

We anticipate that our customers will increase their 5G investments

significantly in 2019 to repurpose their existing cellular infrastructures and
build new edge architectures for hosting 5G networks, which will include
cloud radio networks. Performance and cost optimization will be critical to
set the stage for 5G and we see network carriers starting to capitalize on
disaggregated, open-source-based commodity networking hardware and
virtual wireless networking stacks.

5 IT Predictions for Digital Business in 2019 from Equinix

Prediction #2: Riding the Rise of Distributed Artificial

Intelligence Architectures

Next-gen artificial intelligence (AI) architectures will break free from

centralized locations

AI will continue to make its way into our business and personal lives,
driving productivity in unprecedented ways. According to PwC research, AI
will spur global GDP to grow 14% by 2030 to the tune of $15.7 trillion.[ii]

As more data gets generated, processed and analyzed at the edge, we

expect to see a direct impact on AI architectures. No longer are AI model
building and model inferencing limited to centralized locations. In 2019,
we expect to see more distributed and federated AI applications at local
edge locations, where large amounts of data are being generated.

Enterprises will need to access more external data to improve the accuracy

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of their AI model predictions, which will lead to buying and selling data in
more secure data marketplaces. Enterprises will also resist getting locked
into a single cloud by leveraging AI innovation in multiple public clouds.
Ultimately, the enterprises using next-generation AI architectures will have
to transition to the distributed model of multiple data centers.

Prediction #3: “Un-Blocking” the Chain

A “network of networks” will mature blockchain for greater business
security and monetization

As we predicted last year, private blockchain networks made significant

headway in 2018 as enterprises began attempting to capitalize on their
speed, low cost and security benefits. The relentless surge of data breaches
made this innovative approach to verifying identity and protecting privacy
a game changer—especially in the financial services industry.

More of the world’s largest clouds, consulting companies and enterprises

are moving ahead to solve real business problems using blockchain. By
2022, IDCpredicts that blockchain technology investments will reach $11.7
billion.[iii]

In 2019, we expect to see more enterprises joining multiple blockchain

networks, particularly from the supply chain, finance, government and
healthcare industries. Ultimately, this convergence will create a “network
of networks” that spurs new opportunities and demands for business and
IT leaders. They will be looking for ways to leverage blockchain networks
when business-critical application performance and real-time transaction
updates are non-negotiable. And they will need to integrate multiple
blockchain networks with their legacy applications, making blockchain
gateways increasingly common in 2019.

Prediction #4: Maneuvering the Data Privacy Maze

Changing data protection laws and heightened privacy concerns will

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inspire more progressive and distributed security processes

The global enterprise shift to the cloud is leading to further scrutiny

around company and customer data protection and sovereignty practices.
Since the General Data Protection Regulation (GDPR) put sweeping data
privacy restrictions into law this year, many other countries’ government
agencies have followed Europe’s lead in crafting stricter data privacy
regulations. We’re seeing more enterprises and SaaS providers deploying
mini-clouds in multiple regions to maintain local data residence and
compliance regulations. At the same time, they’ll require distributed data
management architectures that support global network and data fabrics to
coherently manage these distributed cloud environments and integrate
them into existing IT infrastructures.

To contain data privacy breaches and keep control over their data, in 2019
we predict enterprises will focus on new data management techniques such
as homomorphic encryption that allows computations to be done on
encrypted data without requiring access to the data security key.

And new approaches that allow consumers to bring algorithms (e.g.,

financial, risk, security analytics) to where the provider’s data is located
(private or neutral colocation data centers) and apply them against the
data without unencrypting it will also enter the market in 2019. This year,
we introduced a hardware security module (HSM)-based virtualization
technology, Equinix SmartKey™. It is a cloud-agnostic, HSM-as-a-service
at Equinix that keeps data encryption keys separate from the data that is
stored on-premises or in the cloud, preventing service providers or bad
actors from “peeking into” a company’s data. Equinix SmartKey plays a
critical role in ensuring the security of data access across
hybrid/multicloud infrastructures.

Prediction #5: Tapping Interconnection to Tame Cloud

Complexity
Hybrid multicloud environments willincrease the relevance of
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interconnection

Private cloud providers are taking some pages out of the public cloud
playbook and working to ease cloud deployment and management, while
making it more advantageous for enterprises to deploy these solutions in
third-party locations. At the same time, the maturation of
virtualization/container technology and the standardization of container
formats (e.g., Docker) and orchestration technology (e.g., Kubernetes) are
increasing hybrid/multicloud environments as the enterprise architecture
of choice.

More than 80% of companies are running multicloud environments with

up to five different cloud platforms, according to RightScale.[iv]To
maintain flexibility and choose the right cloud for the right job, enterprises
are increasingly avoiding single cloud provider lock-in. For example, they
want to be able to store private data on-premises or in neutral colocation
data centers while accessing compute services or applications from
multiple public clouds. Hybrid/multicloud infrastructures are also driving
the demand for greater private interconnection between enterprises and
cloud and IT providers, with Interconnection Bandwidth projected to grow
98% annually between 2017 and 2021, according to the Global
Interconnection Index, a market study published by Equinix.

As more enterprises explore SaaS, IaaS and PaaS solutions from multiple
cloud providers, their cloud architectures are becoming infinitely more
complex. And with greater complexity comes greater concerns about the
security, integration and management of hybrid/multicloud architectures,
particularly at the edge. This is why we’ve continued to innovate our
Equinix Cloud Exchange Fabric™(ECX Fabric™) interconnection solution
to meet our customers’ cloud complexity challenges. ECX Fabric is
designed for scalability, agility and connectivity over a self-service portal or
API where through a single physical port, enterprises and services
providers can directly, securely and dynamically connect distributed

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infrastructures and digital ecosystems on Platform Equinix® via global,

software-defined interconnection. ECX Fabric also enables remote access
to different cloud platforms across multiple metros.

Looking forward to a more interconnected future

Rapid technology advances will continue to open the door to greater digital
business speed, efficiency, security, intelligence and scale. But without
proper IT infrastructures that are conceived and built to leverage
interconnection to simplify complexity and integrate digital technologies
from the start, organizations will not be able to realize their full benefits.

Are you prepared to leverage next-generation innovation and

interconnection to make your IT infrastructure digital-ready to succeed as
a digital business? To learn more about how your company can harness
private interconnection to reach everywhere, interconnect everyone and
integrate everything, check out our Platform Equinix Vision paper. And
watch this space for future blogs that explore each of these predictions in
detail to help you make your way out of the digital awkward years and into
a successful 2019!

Be sure to check out our other Predictions 2019 blog posts:

5 IT Predictions for Digital Business in 2019

Paving a Path to the Promise of 5G
Riding the Rise of Distributed Artificial Intelligence Architectures
Un-blocking the Chain

[i]McKinsey, Are You Ready for 5G?, February, 2018.

[ii]PwC, AI to drive GDP gains of $15.7 trillion with productivity,

personalisation improvements, June 27, 2017.

[iii]Blockchain: Worldwide Technology Market Update and Spending

Outlook, September 2018, Doc #US44268418, IDC.

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[iv]RightScale, RightScale 2018 State of the Cloud Report.

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