For most of the last 10 years, data center to data center traffic has been a huge part of demand for wide area network transport capacity. With heavy consumer demand for web apps of all types, including streaming video, you would expect IP networks that support consumer access to carry a significant amount of traffic.
In 2021, for example, internet traffic overall, which includes business-to-consumer and business-to-business traffic, will be roughly equivalent in magnitude. That is part of a trend that has been in place for nearly a decade, where data center to data center traffic has grown as a percentage of total traffic flowing over wide area networks.
The implications for suppliers of WAN connectivity are significant. It now is possible to capture any demand related to public connectivity revenue simply by focusing on data center to data center connectivity.
In other words, trends in WAN traffic and value have come to resemble the general pattern of global telecommunications, where enterprise or business demand is about equivalent to consumer demand. That does not necessarily correspond directly to revenue shares, but there is a correspondence.
It also is possible to illustrate the value of interconnection (network effect) by examining data flowing between organizations and servers within a data center. Much of that traffic represents interconnections and data flow between collocated entities within any single data center.
Pre-internet, connectivity providers were the main actors in collocation activity. These days computing as a service suppliers and application providers are a much bigger factor. Connectivity providers might still represent about 64 percent of interconnections, but enterprises represent 34 percent.
source: Equinix Global Interconnection Index
As suggested by the Equinix Global Interconnection Index, private interconnection happens routinely between enterprises, network, cloud and other information technology providers.
source: Equinix
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