Global businesses plan for expansion despite economic concerns

Businesses around the world are planning major investments in digital technologies to support ambitious expansion plans following lessons learned from the pandemic, according to new findings from an annual survey of technology decision-makers by Equinix, Inc..

The survey suggests that, despite concerns of a potential looming recession and talk at the World Economic Forum in Davos about the end of globalisation, businesses appear to remain bullish about their plans for further global expansion.

Of the 2,900 IT decision-makers surveyed globally in the Equinix 2022 Global Tech Trends Survey, 72 per cent of respondents indicated their organisation is planning to expand in the next 12 months, into either a new city (31 per cent), a new country (33 per cent), or a new region entirely (38 per cent).

The global sentiment was echoed by UK-based IT decision-makers, with 43 per cent planning expansion into a new region; 31 per cent into a new country; and 26 per cent into a new city. Overall, however, tech decision-makers in EMEA were less ambitious in terms of expansion plans, with 59 per cent planning to expand into a new market in the next year – perhaps reflecting more caution around economic factors. By contrast, IT leaders in APAC and in the Americas were more optimistic in this regard, with 82 per cent and 78 per cent intending to expand across geographies.

However, a number of potentially limiting factors were identified by businesses when it came to global growth, with supply chain challenges highlighted as a particular area of concern. 59 per cent said their business was plagued by global supply chain issues and shortages, while 58 per cent specified the global microchip shortage as a threat to their business.

These continued supply chain issues appear to be driving a need for more virtualisation, with growth aspirations underpinned by significant planned investment in digital infrastructure. Almost half (47 per cent) of respondents globally said they plan to facilitate global expansion plans by deploying virtually via the cloud, while the UK came in at a lower 40 per cent. More than a quarter (26 per cent) of IT leaders surveyed said they would achieve expansion using a bare metal solution, which was matched in the UK. Meanwhile, 47 per cent both in the UK and globally said they expect increased spending on carrier-neutral colocation solutions to facilitate the planned rise in digital deployments, while even more (59 per cent globally; 61 per cent in the UK) said they intend to increase investment in interconnection services as they plan to progress digital transformation and build resilience.

The pandemic also continues to have a significant impact on businesses’ digital strategies. More than half of global and UK IT leaders (52 per cent and 57 per cent respectively) say they are accelerating their company’s digital evolution because of the COVID-19 crisis. Indeed, over half confirm their IT budgets have increased as a direct outcome of its legacy – an insight into the now broadly acknowledged necessity for robust digital infrastructure to pivot to evolving business needs in an instant. Furthermore, the majority of respondents (61 per cent globally and 62 per cent in the UK) believe the technology changes and investments implemented during the pandemic are here to stay.

Russell Poole, Managing Director for Equinix in the UK, said: “The pandemic has seen truly impressive innovation and incredible acceleration of digital evolution globally, and EMEA is no different. These results highlight more lingering caution felt by IT leaders in EMEA than their counterpart regions—not unexpectedly. While 59 per cent of EMEA respondents intend to expand into new geographies, the UK is tracking slightly higher at 62 per cent, which is hopefully indicative of further growth and transformation to come, despite recent adversity.

“While there have been innumerable challenges over the last two years, the survey reveals some positives that can be taken, such as more than half of UK respondents confirming their digital evolution has accelerated and IT budgets have increased as a lasting result, as well as 62 per cent reporting the changes made under duress in a time of need were sound decisions that will remain in place, at a time when many businesses pan-industry are reconsidering hastily implemented systems.

“It remains an exciting time in the rapidly evolving tech sector, as all regions reported growth and increased investment and planning around new technologies from 5G to Web 3.0, the IoT and XaaS. Equinix remains committed to support our digital partners in their evolutionary journeys through the utilisation of the multiple problem-solving platforms we offer.”

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