Bandwidth, Bandersnatches and breaking the ‘Net’
‘…and shun the frumious Bandersnatch’… Jabberwocky, by Lewis Carroll,
If I had only one word to characterize the NXTComm show last week in Las Vegas it would be ‘bandwidth’. Every year there is a different word, which by the following year is muted by the noise surrounding the next big word or disparaged – as in the case of IMS – when the promised miracles did not materialize as quickly as promised. This year bandwidth – more, faster, safer, cheaper and all in a smaller box – was the buzzword of choice.
There is good reason for bandwidth frisson – the brief shudder of excitement; bandwidth usage is growing dramatically with no end in sight. The NXTComm Daily News for day one – in an exceptionally well-done article about R&D, far above the normal standard for a show news sheet – included a disturbing graph from Cisco, called Growing Monthly IP Traffic. By 2011, in only three years, the graph shows overall bandwidth usage almost tripling – mostly driven by consumer usage. Today, consumer and business IP traffic are about equal, but in three years consumer demand for video (IPTV and cable TV) alone, excluding consumer Internet use for all other purposes, will exceed overall usage by businesses.
The more I looked at the graph, the more I began to wonder if it could be correct. If consumers will drive most of the bandwidth growth, who will pay to build out the network to meet the demand? Overall, the numbers I have seen show growing bandwidth usage, but little growth in overall revenue -certainly not enough extra revenue to multiply network capacity by three or more in the next three years. Now, consumer budgets are relatively inflexible – to spend more on communications services they have to spend less on something else. So, given rising prices for gasoline, food and probably almost everything else, where will the money come from? The carriers are facing a monster, a frumious bandwidth eating Bandersnatch of sorts, but have no ‘Vorpal blade’ to slay it.
If I were a serious industry analyst, I would have spent days researching this question – digging into the numbers and the trends, but since this eLetter is simply a stream of consciousness effort, my spontaneous musings on-line, I might easily be missing some important factors that change the whole earnings / broadband equation dramatically. Nevertheless, I did ask a number of people at NXTComm if they thought traffic growth would meet the graphed projections and where the cash needed to build the network would come from.
The results of my informal survey were confusing. No one seems to doubt the consumer can pay more, but no one seems to have noticed that salaries aren’t rising much. Almost everyone questioned believed the growth numbers, but many of the same people believed in a capacity crunch, some of these even thought the growth projections were too low. No one could give me a convincing answer (when they had any answer at all) as to where new cash or additional capacity would come from. The most plausible explanation – pieced together based upon the opinions of a number of highly placed sector executives – was that the bigger companies are already growing their networks using low-cost long-term financing they put in place some time ago. Newcomers, however, will have difficulty obtaining financing at a reasonable cost and might well lose ground.
I went to Cisco, the graph’s source, for some answers and spoke with Jeff Spagnola, their Vice President for Worldwide Service Provider Marketing. He gave me some interesting insights and a very recent Cisco white paper, Approaching the Zettabyte Era. The paper makes the astounding prediction that IP traffic, “will exceed half a zettabyte in four years”. A zettabyte is one sextillion bytes (8 bits).
Remember when megabytes and gigabytes sounded big? Well gigabytes are just the beginning; there is still a long way to go. You need to pass first by ‘tera’, ‘peta’ and ‘exa’ – trillion, quadrillion and quintillion – to get to ‘zetta’.
The paper is fascinating; all 23 well-researched pages are filled with facts and astounding/ominous predictions of stupendous growth. The first two pages alone state:
- Annual global IP traffic will exceed half a zettabyte in four years;
- Global IP traffic will nearly double every two years through 2012;
- The Internet in 2012 will be 75 times larger than it was in 2002 (28 exabytes/month equal to seven billion DVDs);
- Total IP traffic grew 55 per cent in 2007 and should grow 63 per cent in 2008;
- Internet video is now approximately one-quarter of all consumer Internet traffic;
- Together, all forms of video (TV, VoD, Internet and P2P) will account for almost 90 per cent of consumer traffic by 2012; and
- In 2002, Internet video will be nearly 400 times the U.S. Internet backbone in 2000 and it would take over half a million years to watch the videos crossing the network each month (I can hardly wait)
There are many more fascinating (stupefying) predictions, facts, trend analyses and explanations in the paper; much more than I can deal with in this letter, so I expect to return to this in the future. Nevertheless, despite the wealth of information, the report does not get into the economic implications and does little to answer the question of how such incredible consumer-driven growth rates can be sustained by inflation-flattened consumers. With little revenue growth, a lot of competition, pressure to build the bottom line, a flat-lining economy and little hope that disposable income will grow it seems only a matter of time before network growth slows.
I might be wrong; it has happened before, and I am especially leery when doubting Cisco’s predictions. I have a pen on my desk – a year-old memento celebrating the thousandth CSR-1 92-terabit super router and a reminder of my failure to understand the need for such capacity. Two years ago I would have guessed that it would take at least five years to reach that mark. They have already sold two thousand and can’t keep up with the demand.
I discussed the white paper with Kelly Ahuja, the Vice President and General Manager of Cisco’s Carrier Routing Business Unit, the unit responsible for the CSR-1. He believes, despite my contention that today’s consumer might not have the cash to pay for much more and that some of the paper’s predictions might even be conservative. Well, given my track record and his, the odds are in his favour; still…
Where is all the capacity to come from? Speaking with executives from a wide variety of companies at NXTComm, I was amazed at the lack of concern regarding Internet capacity and Internet addresses. When asked about the challenges and problems they will have to face during the next few years, not one mentioned the growing probability of a severe Internet capacity crunch or that Internet addresses will soon run out and there is no Y2K-type effort to switch to IPv6 (Internet Protocol Version 6). IPv6 replaces the current version, IPv4 and resolves a number of version 4’s problems especially the growing shortage of IPv4 addresses. I had spoken about this with a number of people, but none had much to say about the prospect of an Internet meltdown.
Oddly enough, despite the apparent lack of concern, on the last day the NXTComm Daily News reported the results of a survey taken during the show by Tellabs and IDC that 51 per cent felt the Internet would ‘break’ (whatever that means) in less than two years. Show goers suggested everything from network neutrality, to usage limits, traffic priorities, deep-packet inspection to determine content types and priorities, and bandwidth metering to charge heavy users as ways to control usage and pay for the additional capacity.
Grant Seiffert, President of the Telecommunications Industry Association, the TIA, was the only one at the show to speak of the IPv6 issue. The TIA aims to become the sector’s ‘thought leader’ for a number of vital issues such as IPv6, green telecommunications (they have an extensive ‘green’ database to help industries monitor compliance), expanded cell phone handset serial numbering, telematics for autos, and ICTs for healthcare. Although most companies claim to support the IPv6 initiative and/or have compliant products, the responses were so tepid they were hard to believe. Judging by the almost total lack of IPv6 enthusiasm at the show, I can only wish the TIA good luck and success (soon, very soon) with their efforts.
Our next Connect-World India Issue will be published early next month. This edition of Connect-World will be widely distributed to our reader base and, as well, at shows where we are one of the main media sponsors such as: India Telecom, New Delhi (11-13 December) and Convergence India, New Delhi (19-21 March 2009).
The theme for this issue will be: Seamless networks and seamless business in a seamless world.
Technologically, if not politically, the world is becoming increasingly interconnected, interdependent and interoperable. Few if any big companies are ‘national’ in the old sense; they no longer exist, work buy supplies and services and sell within the boundaries of a single nation. Supply chains and processes of all sorts reach into other nations and at times circle the globe crossing and interacting with one another, first in one nation than another, in subtle and complex ways.
Nowhere is this more obvious than in India, where broadband connectivity has, seemingly overnight, reinvented the country’s economy and re-written its future. More than just outsourcing, taking over existing processes in behalf of companies in other parts of the world, India is increasingly sourcing its own processes, its own technologies and products.
The speed and seamless interconnection and interoperability of the world’s networks, both wired and wireless, using a wide variety of transmission media and technologies, is now so common it is rarely noticed by the user, but much of India’s growth depends upon just this. This effortless connectivity makes possible the seamless interoperability of business processes and supply chains spread throughout the world. Today’s technology is inventing a seamless, global, work environment that might, one day, lead to a seamless world.
This issue of Connect-World India will explore the influence of information and communication technology upon the transformation of India, and how India is itself transforming the technology and processes and helping create a seamless world.
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