Equinix (EQIX) recently published its third annual Global Tech Trends Survey (GTTS).  This survey gathers views and insights from 2,600 IT enterprise decision makers in 26 countries across EQIX’s three regions (Americas, Asia-Pacific and EMEA).  It never disappoints!  Given its strong connectivity reach, one could argue that more than any company, Equinix has the most ‘tangible touchpoint’ as to how enterprises are viewing the digital infrastructure space and their future needs.

While this report had many take-aways and learnings, the three most interesting data points in my view were as follows:

  1. Virtual Is Way Of Future– More than half (57%) of companies still plan to expand infrastructure but more importantly, almost two-thirds (63%) of them plan to achieve this virtually rather than investing in physical IT infrastructure.    In reading this stat, it  reminds me of what AT&T once said: ‘we are moving from a hardware company to a software one….vendors that support this will be with us…ones that do not will not be along for the ride’.
  2. The Clouds Will Continue to Get ‘Puffier’  Almost 60% of respondents are planning to invest in technology to make their businesses more agile post-COVID.   While this is not surprising – how much they are bear hugging the cloud to increase this agility is.  Specifically, 68% of enterprise respondents said plan to move more functions to the cloud.  So that runway is still very long.   Put another way, if you are a data center or fiber company, the cloud most definitely will continue to be your friend, not foe.
  3. 5G – The New “Frenemy”? –  This was the point most interesting to me.  50% of the respondents agreed that 5G will have the biggest impact in getting them  access to new technologies, but in the same breath, over one-third are nervous they will need to  “rearchitect infrastructure” to do it.   In some ways this is somewhat contradictory  to point # 1 above. Based on their answer above,  there is a realization by enterprises there is a  need to spend.  However, unlike IT infrastructure (which can bend more virtual), it is hard to get around any 5G infrastructure without a lot of physical hardware behind it.  Virtualization in 5G is happening, but you need a whole lot of physical infrastructure to get there.

It is all ol’ chicken and egg discussion with 5G: Build it and it will come, but it won’t come until it is built.   Those enterprises that sit out on this spending run significant risks of being part of the ‘left behind’.  We think most realize it and if you are a company leveraged to this space (towers, small cell, DAS owners, private network players, edge compute, etc) the roaring 20s may be just beginning!

While we know an author is always biased toward their own work, those companies which are at the center of these themes are the connectivity-rich data center entities.  Equinix and Digital Realty top this list.  A perhaps overused line in the wake of COVID has been “companies need to make a digital pivot.”  Of course this is true.  But there are layers underneath this ‘digital pivot’ that should not be ignored.  While the loud sucking sound of the cloud has been appreciated for a while, the impact of 5G on data centers has not.

In word searching the last EQIX Q1’21 earnings conference call, it is interesting to note that while the word ‘cloud’ came up 18 times, the phrase ‘5G’ came up only once.   Dollars to donuts (to quote my 75 year old mother!) that mention goes up big time this time next year.