AI Shifts Businesses from CAPEX to OPEX: Services Replace Equipment
By 2026, 80% of new enterprise digital infrastructure investment is forecast to be operated through a subscription-based model, according to the Global Interconnection Index (GXI) 2024 released today.
GXI 2024 predicts that in order to meet the ever-growing demands of data-dense technologies such as AI, 5G and edge computing, IT decision-makers are increasingly shifting away from long-term purchases of physical equipment, such as servers, routers and storage arrays, in favor of flexible subscription-based models. This shift from CAPEX to OPEX started with multicloud adoption but is now becoming the norm across all infrastructure out to the edge, providing enterprises with greater agility in architecting their infrastructure everywhere while ensuring they have access to the most efficient technologies.
“Industry patterns have shown that the traditional procurement process of buying your own IT hardware, if that is not your business, is becoming a competitive disadvantage”
Steve Madden, Vice President of Digital Transformation & Segmentation, Equinix.
“Industry patterns have shown that the traditional procurement process of buying your own IT hardware, if that is not your business, is becoming a competitive disadvantage,” said Steve Madden, Vice President of Digital Transformation & Segmentation, Equinix. “The pace of hardware innovation is increasing (especially with GPU technologies), putting pressure on price-performance ratio and infrastructure efficiency.”
Additional Forecast and Trends from GXI 2024
- Digital economy continues to expand: Global interconnection bandwidth is forecast to grow at a 34% five-year compound annual growth rate (CAGR), reaching 33,578 terabits per second (Tbps) by 2026.
- Accelerating growth of ecosystems: Organizations are connecting with 30% more business partners in twice as many locations.
- Digital proximity drives business at the edge: Edge infrastructure has shown the highest growth rate, and is expected to expand at over two times the rate of core through 2026.
- Mumbai is one of the top three fastest-growing Edge metros, with a forecasted 43% CAGR over the next five years.
Elias Khnaser, Chief of Research, EK Media Group, said, “In the current dynamic environment, subscription-based access to thriving ecosystem is the only way organizations will be able to build and scale a digital infrastructure capable of sustaining the business transformation resulting from AI, edge and other technologies.”
