By: Jonathan Hjembo

As the world's appetite for faster, more reliable internet reaches new heights, emerging hubs of network interconnection are cropping up across the globe. In following the relentless pace of ICT development, the question I hear the most is, “Where is the next big hub going to be?” Before addressing that, however, it’s useful to consider another question: “What makes a connectivity market a hub?” If data center investment infuses a market, does that make it a hub? How about if a subsea cable lands near a city? Or if a cloud region deploys to a location?

Before we break down five markets we’ve got our eye on, let’s look closer at how best to assess the relative strength and potential of connectivity markets.

How to Evaluate Connectivity Markets

First, it’s important to remember that network infrastructure does not develop in a vacuum. Numerous interdependent components work together to create a thriving, inter-meshed environment for interconnection. I recommend considering nine core factors to consider as part of a holistic view of a hub's offerings.

Data Centers: Data centers provide the housing for a communications market and the underlying infrastructure to keep networks online. These are the buildings where carriers meet to exchange traffic, where cloud providers provide access to compute and storage, and where enterprises interconnect with providers and build their networks. In short — where the internet happens. Where there is data center capacity, there is network activity. Data center capacity in deployment — as well as in the pipeline — gives us a strong indication of where network activity is taking place. This makes it a key indicator for interconnection.

Internet Exchanges (IXs): Internet exchanges (also known as IXs or IXPs) are network fabrics consisting of ports, switches, routers, and interfaces where networks meet to peer with one another. We can think of them as traffic intersections for the internet. Typically very transparent in sharing specific locations, membership information, and traffic statistics, IXs provide a rich indication of local market health. A market with multiple IXs, interconnected across a diverse mesh of data center nodes, serving numerous networks, exchanging volumes of traffic is a market that’s well on its way to being a healthy hub.

Pricing: IP transit pricing is a significant aspect of network competitiveness. Lower IP transit costs can attract more network providers to a specific market, fostering competition and potentially leading to more robust interconnectivity. Put more simply: what’s the cost of connecting in a market? If the cost is competitive, or at least rapidly becoming more competitive, that’s a good sign.

Cloud Infrastructure: Cloud infrastructure uncovers the extent to which cloud applications can be delivered locally. The mere presence of cloud on-ramps and regions is a vital component of scoring market connectivity. On-ramps indicate that there’s enough of a local market for the services to warrant an initial deployment, easing access to cloud services located elsewhere. Full region deployment with a multiplicity of data centers indicates that the local market has generated enough cloud traffic to warrant extensive investment.

Long-Distance Transport: Evaluating the amount of international internet capacity tied to the market and the number of international cities directly connected to this market are significant indicators of how integrated the market is with the outside world.

Local Access: Competitive local network ecosystems are vital for thriving hubs. Robust local access infrastructure provides the foundation for connecting data centers and luring other operators, which is the alchemy you want to see when measuring interconnectivity.

Power: Power is the very lifeblood of any interconnection hub. This has been made abundantly clear in the last five years as the world’s largest hubs increasingly wrestle with its scarcity. Our Data Center Research Service estimates that, as of 2024, colocation operators in the top ten data center markets by MW consume about 13 gigawatts of power. That's enough power to generate electricity for roughly 10 million homes — or, in this case, only about 1,000 commercial data centers. As many critical communication hubs suffer from a full-blown crisis due to a lack of electricity to support data center, cloud, and network needs, a city's current and planned availability of clean power can provide a profound advantage.\

Geography & Demographics: This one is easy to overlook because it’s almost too obvious. Basic geography and population data are valuable for measuring the relative potential of communications market development. Individual indicators like GDP, population growth, and even the concentration of corporate headquarters provide signals of underlying commercial viability needed to generate network traffic.