North America’s Demand for Interconnectivity Surges

The North American interconnectivity market continues a significant growth trend; Megaport has seen an 80% jump in Monthly Recurring Revenue across the region in the last six months.

Enterprises are increasingly adopting direct interconnection to stay ahead of the game and utilise the new wave of cloud technologies coming through in 2019. In fact, the worldwide public cloud services market is projected to grow by 17.3%, this year, to a total of $206.2B. In the North America region, Megaport has increased its Monthly Recurring Revenue from $0.55M to $1M in the first half of Fiscal Year 2019 – a number that has doubled in the last eight months – showing the rising need for on-demand interconnectivity.

Megaport’s CEO Vincent English talks about the current state of the market, the factors driving this demand, and projections for the upcoming year.

  • What’s fuelling the rapid growth in North America’s cloud market?

There are several factors at play here: firstly, an increased level of knowledge, trust, and acceptance of public cloud services exists among enterprise customers who have become more comfortable with making public cloud a major part of their business strategies. Secondly, cloud providers are making their services easier to consume by expanding cloud on-ramps to the edge and integrating with connectivity enablers like Megaport. This gives customers access to fast, secure, and on-demand connectivity to the cloud services they need while utilising a consumption model that suits their business demands. From Megaport’s standpoint, the go-to-market commitment from our cloud partners has lead to increased education and has highlighted many use cases for customers migrating to the cloud. As a result, there’s a growing desire for multicloud within our customer base as enterprises start to incorporate best-of-breed services into their IT strategies.

  • Which Megaport services are seeing the greatest increase from this growth?

We’re seeing growth across all of our services – this comes down to the maturity of our customers. As we bring new customers and enabled locations into our ecosystem each quarter, we see a direct correlation with the growth of Port consumption. On existing Ports, more customers are taking advantage of cloud provider choice for their multicloud strategies, as well as the speed of connectivity – and dynamic ease of use – they can access through our Portal, which differentiates Megaport from the traditional means of connecting. This enables efficiency and scalability for use cases like disaster recovery, data backup, and onboarding of workloads into new cloud environments. Megaport Cloud Router has also seen strong product growth since its 2018 launch – particularly for multicloud usage and moving data between public cloud providers, as well as private IT infrastructure.

  • Where has Megaport made investments in order to both support and drive this interconnectivity demand?

Earlier this Fiscal Year, we made substantial investments into our people and resources across areas of development and sales enablement. Growing these teams enables us to double down on the success upon which we’ve built a foundation. Overall, we have an exceptional group of people working at Megaport, and the enthusiasm and energy is infectious across the company. Investing in our development teams means we can continue to focus on our customer journey and user experience – not only with our current products but also with new and emerging services like Megaport Cloud Router, to further enable Layer 2 and Layer 3 connectivity. This will continue to drive interconnect uptake as well as continued growth in markets and new locations.

  • What’s the trajectory for 2019 in terms of the North America market and Megaport’s plans for capturing this momentum?

Reaching $1M in Monthly Recurring Revenue in the North America region was a huge milestone for Megaport and supports a building momentum for interconnectivity. It shows that we’re getting more traction across Tier 2 and 3 markets where enterprises enable their private IT infrastructure. We’ll enable more and more cloud on-ramp locations, driving connectivity to become decentralised and offering widespread network access for customers, throughout the second half of the year to June 2019. Both our global network and partnerships will continue expanding throughout Fiscal Year 2020 to enable service providers to reach more customers and to bring our entire ecosystem to more enterprises.

Read our full ASX announcement on Megaport’s 1HFY19 revenue performance here.