by Manfred Riepe
The current business world is unimaginable without the internet – and its importance will only continue to grow. But its capacity limits are being reached. Direct connections between companies offer advantages that the World Wide Web (WWW) cannot. Private network interconnection (PNI) is booming, not only because it is considerably faster than the WWW, but because it is more secure. Private networks create space to circumvent data protection regulations and they are on course to cut into the public internet’s market share. Will the internet as we know it today become merely an access network in the not so distant future?
Private network interconnection is significantly faster than the public internet.
Direct data connections between companies enhance the level of security.
PNI is not public space, meaning that data protection restrictions on big data analyses are largely eliminated.
At first glance, private network interconnection seems like a step back into the time before the internet. For direct connections, the dust is being brushed off the old cable reels, so to speak, with technicians running wires from door to door or from company to company – just like the old tin can telephones connected by string that children used to talk from the trees. But this supposed step away from global networking to targeted direct connections harbours decisive advantages.
- The internet as we know it will soon no longer be fast enough for advanced use.
- The WWW is not secure enough for transmitting sensitive data.
- Privacy regulations significantly limit the scope of big data analysis.
Will the open internet soon be too slow?
As digitalisation marches on, the internet’s great advantage – over which users have no control – is gradually turning into a disadvantage. The public network, once the grand accelerator for many types of business, is starting to slow things down. And this is just the tip of the iceberg. As more and more companies shift their computing and storage resources to the cloud, internet traffic increases. Future technologies such as artificial intelligence, virtual and augmented reality or the Internet of Things only further inflate the mass of data on the internet. As a result, bits and bytes crawl through the transmission lines at a snail’s pace, which inevitably leads to network latency and disruption of digital service usage. Delays are counterproductive, however, when it comes to providing business partners with high-quality applications. Problems may sometimes be trivial: someone sends an email and it doesn’t arrive. Maybe they send it a second and third time with the same result. This may not happen often, but it happens – and usually at the most inconvenient time for business.
The need for interconnection bandwidth is rising dramatically
The company Equinix’s expert knowledge has proven that interconnection offers the solution. The data centre service provider, which operates data centres in 52 markets across Europe and the Asia-Pacific region, is one of a handful of global players in this field. The company connects 4,400 companies worldwide, including financial service providers, network operators and content providers. Their customers include Deutsche Telekom, General Electric, Microsoft, Facebook and Sony. According to German newspaper Frankfurter Allgemeine Zeitung, Equinix recently decided to expand a data centre in Frankfurt, an undertaking worth EUR 100 million.
According to Equinix, interconnection is one of the most important developments in modern data transfer. At the end of 2018, the company presented its annual Global Interconnection Index (GXI) for the second time. This market study specifically measures the bandwidth of connections involving data exchanged via direct and private connections within data centres. About one and a half thousand companies with different locations, industry affiliation and size were surveyed for this purpose. According to the study, the bandwidth required for interconnection is expected to increase to more than 8,200 terabits per second (Tbps) by 2021. The average internet bandwidth in the megabit range is significantly lower.
The forecasts made are supported by an Equinix survey of 100 decision-makers operating in the information technology industry in Germany: almost half of all respondents already make use of interconnection for their companies. About two thirds (63%) of respondents expect the importance of PNI for their business to increase in the years to come. “The second edition of the index,” says Donald Badoux, Managing Director of Equinix Germany, “confirms a trend that we have been observing for some time now in our data centres: the need for interconnection bandwidth is rising dramatically, and more and more companies are recognising the value of private, direct connections to their customers and partners.”
Reducing the scope for cybercrime
Private network interconnection has another decisive advantage to offer: While the open WWW is becoming the Achilles’s heel of the networked economy, private connectivity significantly reduces the scope for cybercrime. PNI offers potential offenders fewer opportunities to steal sensitive information. As a result, companies that have to transfer large amounts of sensitive data as quickly and reliably as possible are becoming interconnection users. In addition to the telecommunications industry and cloud and IT servers, for which Equinix is forecasting growth rates of 30-40%, demand for direct connections in the banking, insurance and manufacturing fields is expected to rise to over 60%.
One of the most obvious advantages of private connections is one that is not readily talked about: “In view of significant economic, technological and regulatory developments that are not only highly complex but also involve significant risk,” says Sara Baack, Chief Marketing Officer at Equinix, “the integration of physical and digital worlds continues to gain in importance.”
Private network interconnection is not public space
The regulatory developments referred to by Baack also involve data protection. Since the EU General Data Protection Regulation (GDPR) came into effect, the WWW – which is public space – is now subject to strict regulation. In order to comply with the protection regulations required by law, a significant amount of data may no longer leave the sphere of influence of the company that collected it. But this development needs to be looked at from different angles: On the one hand, digital civil rights and the protection of individuals against criminal spying cannot be prioritised enough. The GDPR, on the other hand, also places restrictions on the legitimate analysis of mass data, which is the basis for business for banks and insurance companies.
Private network interconnection is not a public network. It falls outside the GDPR’s scope of application. Because of this, interconnection offers new possibilities for applications that have been considerably restricted for data protection reasons.
Photos: © shutterstock.com/Toria