The Growing Importance of Network Interconnection Hubs in a Digital-First World

In today's digital-first economy, from financial transactions to office collaboration tools, online services are driving the need for faster, yet more reliable data exchange across industries.

Behind these services are fast network connections used to connect the various digital data sources involved. Any slowdown or disruption at any single point can lead to degraded customer experiences and negative business outcomes. 

For IT leaders, network connections will become even more important over time. The digital economy in Southeast Asia was expected to grow to US$263 billion in gross merchandise value in 2024, up 14% from a year before, according to a Google, Temasek, and Bain & Company study released in November 2024. The requirement for faster network connections becomes even more urgent, as more of such services come online and customer expectations rise. 

The pivotal role of interconnection hubs

Network interconnection hubs play a crucial role in this increasingly digital-first world—they improve the vital flow of data, the lifeblood of our digital economy. These hubs, typically housed in a data centre, facilitate faster data exchange and provide low latency links to connect digital-economy players.

Such a hub, with strong network density, will connect organisations in close proximity, often in the same building. As a result, data will take the shortest, most optimal route to maximise flow. 

Besides optimising data exchange, an interconnection hub also boosts cost efficiency. Multiple parties that are not in the same data centre would need a network service—typically a leased line service or dark fibre—to connect between locations. Unfortunately, these types of connections are costlier than a simpler cross-connect in an interconnection hub.

In an interconnection hub, new connections can be provisioned quickly, since they would be within the control of a data centre service provider, allowing organisations to scale up and collaborate with other businesses more efficiently.

Delivering a superior experience

Linking up to an interconnection hub means organisations can deliver their digital services at the level of performance their customers expect. Increasingly, these expectations are rising, as users have become accustomed to instantaneously accessing digital services anytime, anywhere. Interconnection hubs help fulfil these requirements through various ways:

• Low-latency services: Real-time applications such as video conferencing, online gaming, financial transactions and AI-driven processes all require connections that deliver data with the least lag possible. Without the low-latency connections at an interconnection hub, a business may have to connect to a partner or vendor via multiple “hops” across the Internet, significantly degrading the user experience.

• Improved connectivity: A single digital service often needs to connect to multiple online sources of data to function, whether it is e-commerce, banking, government services or e-payments. Similarly, many workplace applications that rely on a software-as-a-service (SaaS) model work better with interconnection hubs providing all the necessary connections; this is because of the lower latency, more optimal routes these hubs provide, compared to longer links that require several “hops” across the Internet.

• Connecting the cloud and edge: These use cases have also driven the need for interconnection hubs, which offer better connections to various devices and online services. These hubs are vital to optimising such computing environments by allowing seamless integration between users, service providers and infrastructure.

• Catering to data traffic, globally: Many organisations are looking for better ways to manage data flow. Being hooked up to an interconnection hub means these organisations’ users will connect more efficiently to the many related services they are accessing.

• Enhancing resilience and security: The diversification of connection points offered by interconnection hubs enable organisations to reduce the risk of single points of failure. A cross-connect within an interconnection hub is a short run of cable that is easier to replace and re-install. in comparison to fixing a breakage in a fibre optic cable running across a metropolitan area. An interconnection hub also provides enhanced resiliency to unplanned disruptions since cross-connects offer a direct physical connection within a strictly controlled environment such as a data centre.

New solutions for new requirements

Interconnections may not be a new concept but today’s digital economy is driving the need for solutions that cater to evolving requirements. 

Many organisations are seeking an operator that provides interconnection across geographical locations to match their rapid expansion across multiple markets. In assessing these operators, some organisations may prefer a carrier-neutral partner which can deliver services to users connected through different carriers within a country.

Here, ST Telemedia Global Data Centres (STT GDC) is strategically positioned to meet the growing need for network interconnection. A fast-growing player in the market, we have been positioned in the Major Players category in the IDC MarketScape for Asia/Pacific Datacenter Operations and Management 2023 report.

Notably, STT GDC is the only data centre provider with a footprint that spans six major markets in Southeast Asia through its regional interconnection hubs. STT Makati, for instance, is a top two interconnection hub in Manila, the Philippines. Meanwhile, in Ho Chi Minh City, STT GDC is the first international carrier-neutral data centre operator.

STT GDC has the ground knowledge and local market connections to make a real difference to organisations in the region.

For more information, contact STT GDC.