- Despite Corona, the infrastructure layer will grow from 28.7 billion Euros (2019) to 30.3 billion Euros in 2020, thus growing faster than the other segments of the Internet industry
- The Corona crisis leads to an annual growth rate of 1.7 percent higher than originally expected for the Internet infrastructure from 2022
Corona is slowing down the growth of the Internet industry this year. In total, revenue will decline from 147 billion Euros (2019) to 145.3 billion Euros in 2020. However, the negative effects are expected to be at least compensated for by the end of 2022. In particular, Layer 1 of the four-layer model of the Internet of eco and Arthur D. Little, Network, Infrastructure & Operations, is growing despite Corona and will even profit from the crisis in the medium term. This is shown by the preliminary results of the study “The Internet Industry in Germany 2020-2025”, which Arthur D. Little and eco – Association of the Internet Industry presented in May.
“More employees working from home, necessary digitalisation in the education sector and more and more corporate IT from data centres: Corona is increasing demand in the colocation & housing sector and for high bandwidths, which will ultimately accelerate digitalisation for years to come”, says Dr. Béla Waldhauser, spokesperson for the Alliance for the Strengthening of Digital Infrastructures in Germany, founded under the umbrella of eco, and Leader of the eco Competence Group Data Centre & Infrastructure. “Internet infrastructure will continue to grow in 2020 and thus hold its own better than the other segments of the Internet industry during the crisis.”
“However, due to Corona, growth this year is around 1.6 percent lower than expected at the beginning of the year,” adds study author Dr. Nejc Jakopin, Principal at Arthur D. Little. From 2022 onwards, however, the “Corona effect” ensures that this dent in growth is at least compensated for and that growth up to 2025 is 1.7 percent higher than expected. “Overall, the Internet industry will show average annual growth rates of 9.5% until 2025.”
Dr. Béla Waldhauser explains why the Corona effect only sets in with a time delay: “Creating new Internet infrastructure is comparatively costly and takes up to two years of lead time, especially when we are talking about new data centres. The demand for colocation and housing already exceeds the supply and will continue to grow due to Corona, as many companies now want to reposition themselves. Corona offers us the opportunity to make clear the importance of digital infrastructures for business locations.”
“Corona shows the importance of digital infrastructures for business locations.”
The eco Association and Arthur Dr. Little have been investigating the development of the Internet industry in Germany regularly since 2018. The most recent joint study is expected to be published at the end of June. It examines the development of the Internet industry up to 2025, develops scenarios for digital infrastructure in Germany in 2030 and differentiates between the four layers of the Internet model and 23 segments.