Data centre 
interconnect

Data centre interconnect grow in importance to enterprises

As more businesses go digital, the role of the data centre has grown to enable them to gain scale, speed and performance for new apps and workloads. Whether this is to process data for fast-paced online trading or in handling massive amounts of clinical data in healthcare, the demand on infocomm infrastructure is growing by the day.

Besides growing one’s compute and storage in a data centre, it is just as important to consider how well an enterprise is connected to others. Whether this is to public cloud platforms or other data centres, a strong link to the one’s data centre facility is key.

In the past, when most transactions were carried out with fewer parties involved, this was not a big issue. Enterprises could easily identify and beef up a handful of the most important links. Today, there are many more such links because multiple enterprises often work together to create new value. The demands for such interconnections are also higher.

For example, with high-frequency trading applications, the speed of communications between partners can mean the difference in making millions of dollars in split seconds. Connectivity between systems directly over fibre is obviously the fundamental enabler to allow such high-frequency transmission.

Other industries are also looking to faster connectivity to handle their data. This includes oil and gas exploratory data in the energy sector and radiographic images in healthcare. A connection can be in the same data centre, in the next building or across continents. In today’s fast-paced business world, an interconnected network is becoming more critical.

This calls for an ecosystem built on data centre interconnect (DCI). In the years ahead, high-speed, secure, low-latency communications among enterprise assets and cloud resources is not only good to have–it is key to survival in a competitive environment.

While many data centres may be well-connected with other enterprise data centres and have adequate Internet access, not many have specialised high-speed circuits to multiple cloud providers, service providers, information and data sources. They need to ensure that the infrastructure keeps up with the changing demands of massive data growth, fragmented applications, multiple and diverse data sources and sinks.

With DCI, distinct assets within a multi-tenant data centre are connected to each other directly. These connections may be as simple as fibre-optic cross-connects, but they have to allow data-centre-based assets to horizontally connect to multiple carriers, cloud providers, peers and service providers.

We get the performance needed when we combine interconnection with high-speed enterprise access to the multi-tenant data centres, where assets such as compute, storage and networking are available.

Building the data centre ecosystem

In fact, data centre peering using interconnection is not new in the market. Co-location providers have been connecting network providers to each other for more than a decade, to facilitate extended reach for network providers and interconnecting content delivery networks with communications providers.

Things are a little different today, however. With the demand for very low latency connectivity for applications such as high-frequency trading, DCI is key to building a data centre ecosystem of like-minded enterprises and information providers.

Revenues for the DCI market valued at USD 8.2 billion in 2022, will see a compound annual growth rate of 13.5 per cent between 2023 and 2032, according to Global Market Insights. The key driver here is faster, more reliable and higher-capacity connections.

For data centre service providers, there is an urgent need to bring external networks and services to the enterprise, introduce the cloud-based and enterprise-based applications to the enterprise and eventually build out connections to the many peer organisations involved in the digital business solution. Some applications may include the integration of multiple databases and data sources, but the latency involved in communications is likely to stack up in complex transactions where information transmission becomes painfully slow and inefficient.

This calls for a number of changes. Integrating modern switching with the topological benefit of data centre interconnection, enterprises can boost performance to deliver the performance demanded by new apps and workloads. At the same time, an increasingly API-driven network model means that peers can interconnect based on logic, such as external triggers, thresholds and events. This means a more dynamic and reliable link, unlike the past where a connection can be easily broken, much like a fibre optic link.

Looking ahead

As they move more processes online, businesses are likely to call on more databases, different data sources and various cloud providers. All these require very low latency between multiple systems. This is unlikely to be executed through WAN (wide area network) links from enterprise to individual cloud providers, with switching taking place back on the enterprise's premises. Thus, the key is to provide a secure and low-latency network between data centres, which is what DCI provides for.

Simple topology and physical interconnection via fibre optics will drive this adoption. As DCI fabrics become more prevalent, their APIs become standardised and the speed of these connections increase, more useful apps will emerge.

Performance is but one advantage. DCI will allow dynamic interconnection between enterprise peers, cloud providers, communications providers and a growing marketplace of service providers to build an ecosystem. This data centre ecosystem will in turn attract more partners to join the network. Partners will find it beneficial to stay within the ecosystem.

By investing in DCI early today, enterprises will reap the benefits of improved business performance. In a digital economy where massive amounts of data are processed each day, the ability to make sense of it could make or break an enterprise in the years ahead.

Find out how StarHub Low Latency Data Centre Connect can enable your digital business to be future-ready. Please contact your account manager or call 1800 888 8282 or email business@starhub.com.