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Strategy Center

451 Research - Interconnection 101

451 Research - Interconnection 101

As cloud usage takes off, data production grows exponentially, content pushes closer to the edge, and end users demand data and applications at all hours from all locations, the ability to connect with a wide variety of players becomes ever more important.

KEY FINDINGS
  • Network-dense, interconnection-oriented facilities are not easy to replicate and are typically able to charge higherprices for colocation, as well as charging for cross-connects and, in some cases, access to public Internet exchangeplatforms and cloud platforms.
  • Competition is increasing, however, and competitors are starting the long process of creating network-densesites. At the same time, these sites are valuable and are being acquired, so the sector is consolidating. Having facili-ties in multiple markets does seem to provide some competitive advantage, particularly if the facilities are similarin look and feel and customers can monitor them all from a single portal and have them on the same contract.
  • Mobility, the Internet of Things, services such as SaaS and IaaS (cloud), and content delivery all depend on net-work performance. In many cases, a key way to improve network performance is to push content, processing andpeering closer to the edge of the Internet. This is likely to drive demand for facilities in smaller markets that offerinterconnection options. We also see these trends continuing to drive demand for interconnection facilities in thelarger markets as well.
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