Interconnection
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. This report introduces interconnection, its key players and busi- ness models, and trends that could affect interconnection going forward. KEY FINDINGS Network-dense, interconnection-oriented facilities are not easy to replicate and are typically able to charge higher prices for colocation, as well as charging for cross-connects and, in some cases, access to public Internet exchange platforms and cloud platforms. Competition is increasing, however, and competitors are starting the long process of creating network-dense sites. 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 similar in 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 and peering closer to the edge of the Internet. This is likely to drive demand for facilities in smaller markets that offer interconnection options. We also see these trends continuing to drive demand for interconnection facilities in the larger markets as well. © 2015 451 RESEARCH, LLC AND/OR ITS AFFILIATES.
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