Why 80 percent of Enterprise Digital Infrastructure Will Be Subscription-Based by 2026?
Mokshita P.
10x Industry

Why 80 percent of Enterprise Digital Infrastructure Will Be Subscription-Based by 2026?

The Global Interconnection Index 2024 highlights a significant industry shift as enterprises prioritise subscription-based models over traditional hardware purchases, enhancing agility in the era of AI, 5G, and edge computing.

In a revelation, the recently released Global Interconnection Index (GXI) 2024 predicts a seismic shift in the landscape of enterprise digital infrastructure investments. By 2026, a staggering 80 percent of new investments in digital infrastructure are anticipated to be driven by a subscription-based model, marking a significant departure from traditional long-term purchases of physical equipment.

The GXI 2024 report highlights that the escalating demands of data-intensive technologies such as AI, 5G, and edge computing are propelling IT decision-makers towards flexible subscription-based models. This shift from capital expenditures (CAPEX) to operational expenditures (OPEX) began with the adoption of multi-cloud solutions but is now rapidly becoming the standard across all infrastructure, extending seamlessly to the edge. This transformation provides enterprises with enhanced agility in architecting their infrastructure while ensuring access to the most efficient and technologies.

Steve Madden, Vice President of Digital Transformation & Segmentation at Equinix, emphasised the competitive disadvantage associated with the traditional procurement process of owning IT hardware, especially for businesses not directly involved in the hardware sector. Madden stated, "The pace of hardware innovation is increasing, putting pressure on price-performance ratio and infrastructure efficiency. Subscription models can offer continuous improvement and easier adoption of new technologies already in place.”

Key Forecast and Trends from GXI 2024:

  1. Digital Economy Expansion: Global interconnection bandwidth is expected to witness a remarkable 34 percent five-year CAGR, reaching an unprecedented 33,578 Tbps by 2026.

  1. Ecosystem Growth: Organisations are projected to connect with 30 percent more business partners in twice as many locations, emphasising the accelerating growth of interconnected ecosystems.

  1. Edge Infrastructure Dominance: Edge infrastructure is to experience the highest growth rate, expected to expand at over two times the rate of core infrastructure through 2026.

Industry Perspective:

Elias Khnaser, Chief of Research at EK Media Group, underscored the imperative nature of subscription-based access in the current dynamic environment. Khnaser stated, "In the current dynamic environment, subscription-based access to thriving ecosystems is the only way organisations will be able to build and scale a digital infrastructure capable of sustaining the business transformation resulting from AI, edge, and other technologies.”

The GXI 2024 report paints a vivid picture of the evolving digital landscape, where enterprises are to leverage subscription models to navigate the complexities of technological advancements and ensure sustained growth in the digital era.