'Huat' does Interconnection mean during Chinese New Year?

By Clement Goh, Managing Director, Equinix South Asia

Clement Goh, Managing Director, Equinix South Asia

‘Huat’ – means prosperity in Chinese – and is particularly prevalent at this time of year, when many of us in Asia extend wishes of success and happiness to our relatives, friends, partners and blog followers in the lead up to the Chinese New Year (CNY).

This year, February 15th, will mark the start of one of the busiest times of the year in Asia – Chinese New Year’s Eve. Similar to Thanksgiving Day in the West, many will be busy buying presents for friends and beloved family members and travelling widely to pay homage to family and loved ones around this festive season. And at the center of this celebration is ‘Huat’ – passing wishes of prosperity to those who play an important role in our lives.

The Chinese New Year is a time of both personal and business connections

Whilst CNY represents a time of personal and familial connections, it is also a period in which interconnection becomes even more critical to a number of different sectors. Increased network traffic in e-commerce, retail and the payments sector is a given during CNY. There is also the huge volley of frenzied activity across travel and hospitality sectors, with increased demand for flights, rail tickets, hotels, and people searching for the ideal restaurant booking.

More recently, this time of year has witnessed increased demand in content delivery and video streaming. During last year's CNY celebration, unique television viewers reached a record 295 million, an 8 percent increase from the year before, whilst a record 632 million video streams were generated on Tencent, an increase of 90 percent from 2015.

The implications for failure here are significant. Inaccessible connections or slow loading content for content streamers means lost subscribers. Payment providers that struggle with connectivity will see users go elsewhere. Travel platforms that cannot connect customers with their desired transportation will lose out to competitors. One thing is clear, at this time of year connectivity can make or break a company.

Interconnection – the key to addressing rising network traffic demand

According to the Global Interconnection Index, published by Equinix, it is anticipated that Asia-Pacific’s Interconnection Bandwidth will grow more than fourfold from 2016, reaching approximately 1,120 Tbps of installed capacity by 2020. In particular, content and digital media is expected to increase at a Compound Annual Growth Rate (CAGR) of 34 percent, sharing 6 percent of the total Interconnection Bandwidth. This digital-driven data boom is being propelled by trends and demands for connection-dependent services such as e-commerce and content delivery.

It is anticipated that Asia-Pacific’s Interconnection Bandwidth will grow more than fourfold from 2016, reaching approximately 1,120 Tbps of installed capacity by 2020

Take for example, leading Chinese integrated communications operator Guangdong Aofei Data Technology Co. It has worked with Equinix to extend its content delivery service via Platform EquinixTM into new markets. Leveraging interconnection, Aofei was able to optimize network quality and ensure fast service delivery to customers by distributing its IT infrastructure in geographically dispersed points of presence (PoPs) to push content to the edge of the network, where it is closest to the end users, for maximum performance. The company is also able to deploy multi-cloud strategy with direct interconnections to all the major CSPs such as Alibaba Cloud, AWS Direct Connect, Microsoft Azure, SoftLayer Cloud, and Tencent Cloud.

The Year of the Dog: our commitment to being “man’s best friend” in business

With mutual prosperity very much at the forefront of what we do, we will continue to play a pivotal role in the developments that will shape our customers’ businesses in the coming year.

• A coming of age for Artificial Intelligence-based applications –Thanks to recent technological advances, we now have available AI-focused processors and deep-learning algorithms needed to bring this technology to life. However, AI systems need to be distributed in a model that can combine multiple data sources with edge deployment and API-enabled path selection to ensure these systems function in real-time. Ensuring a fluid experience is delivered to a user’s smartphone will require high levels of Interconnection Bandwidth, and flexible sharing between data hubs as users travel.

• New subsea cable infrastructures will be the backbone of success – Submarine cable systems have long been essential to the internet. However, the combination of dominant tech trends and internet demographics have amped up data traffic to new levels. We see a new architecture taking hold that will improve costs, deployment agility and interconnection benefits. In September 2017, Equinix announced that it would provide connectivity to the Australian-Singapore Cable (ASC) submarine cable system in Melbourne and Sydney, and enable high-speed connectivity across Asia-Pacific. Along with the Malaysia-Cambodia-Thailand (MCT) cable system, we are expecting to see massive traffic data traffic within the Indo-China region.

• Auditing and data sovereignty will take center stage – Companies are increasingly looking for a global data center platform to meet emerging data sovereignty and auditing mandates. Within Asia, we see an increase in data protection laws and regulations by government bodies–Australia is bringing in new data sovereignty and privacy requirements that will take effect on 22nd February of this year, hot on the heels of similar new laws from Indonesia. With heightened enforcement of data sovereignty regulations in the region, it becomes necessary for organizations to have data centers in multiple regions in order to store data locally. Equinix’s global data center footprint helps satisfy data residency requirements and provides consistent services across locations worldwide.

A year of ‘Huat’

The lucrative prospects of data centers are increasingly attracting new players in Asia. As we move into 2018, we are expecting to see more new entrants in the market, and existing enterprises growing bigger as people become ever more interconnected in the region. With so much of our lives built on connections between people and the insatiable hunger for new services from oft-disruptive market entrants, the need for interconnection has never been more apparent.

Our customers can indeed enjoy a year of ‘huat,’ of successful growth and of great fortune; they are able to scale across a global digital footprint, deliver their own innovative services and technology offerings by embracing interconnection, and leverage vast ecosystems of reach, integration and interconnectivity.