Equinix: Bandwidth Business Is Booming
OREANDA-NEWS. May 19, 2016. Last week’s International Telecom Week’s (ITW) global conference was a vibrant example of how the wholesale telecommunications industry is thriving. ITW hosts industry participants from all areas of the wholesale community: Tier 1, Tier 2 and Tier 3 carriers, mobile/wireless operators, ISPs, VoIP providers and partners from the voice, data, satellite, subsea and fixed-line markets. And, with 7,000 attendees, the business networking opportunities were as plentiful as the number of people waiting in the 10-minute elevator lines.
Interconnections connected with Carol Wilson, editor-at-large for Light Reading, to get her perspective on this year’s ITW conference.
What major trends you are seeing coming out of ITW?
The bandwidth business is booming. These gains are being driven by the increasing numbers of private and public cloud connections required by enterprises. The increasing requirement for cloud connection is really good news for network service providers (NSPs), who have been dealing with commodity bandwidth requirements going up, while costs were dropping. Today, NSPs can offer more value-added services to grow their businesses. For example, they are driving more secure and reliable connectivity to the cloud and dynamic bandwidth provisioning to turn up or down bandwidth to match the cloud’s agility. Also, current cloud latency and performance requirements cannot be met by “best effort services,” such as the Internet, so NSPs are offering more Layer 2 and Layer 3 interconnection services for interconnecting enterprises to the cloud.
What’s the primary cloud interconnection challenge enterprises are facing
Enterprises using cloud services need end-to-end visibility of all of their networks from multiple carriers. They also require more automated, secure, reliable bandwidth solutions that can be priced by usage, time of day, etc.
What are carriers and NSPs doing to help enterprises with these challenges?
On the retail side, we are seeing a lot of big NSPs, such as AT&T and Verizon, developing cloud interconnection services to support hybrid clouds, often using dashboards on a “dial-up and dial-down” basis to help enterprises manage bandwidth requirements across multiple clouds. They are also providing the different kinds of connections that enterprises want across multiple networks, in particular, at the “last mile.” And they are working on providing more automated, secure network-to-network connections and creating ways for traffic to be more fluid. It can be very painful for an enterprise to negotiate contracts on a carrier-by-carrier basis. The entire wholesale industry is helping to automate these connections. For example, software-defined networking (SDN) is being used to enable liquid bandwidth for multi-cloud connections. However, SDN services are currently not standard among all vendors, and this is something on which the industry needs to come together. Network service providers need places where clouds can interconnect seamlessly if they are going to offer their enterprise customers the full range of hybrid cloud options.
What do the next five years look like for enterprises and NSPs?
First, bandwidth will continue to grow. For example, the Internet of Things (IoT) will create a ton of little bits of traffic flying all over the place and increase the need for aggregating that data for transport to data centers for analysis. The IoT will also push data centers closer to the customer at the endpoint/edge of the network to handle that aggregation. People want to aggregate IoT data close to where it originates via distributed data lakes for faster processing and analysis, and the networks have to connect to all of these pools of data together.
In five years, enterprises and service providers are going to need connections across all of these distributed data centers, and colocation is going to be a big factor in making this possible. Companies may not want to put their stuff in a public cloud, but they’ll put enterprise equipment and more sensitive data and content in a colocation at the edge. And that colocation needs to be close to compute, analysis, networks, clouds and especially metros. With the advent of 5G wireless, there will be a growing number of cell tower and WiFi infrastructures required, and connecting those to provide backhaul will be a major factor driving the need for more metro interconnections.
With equipment vendors bringing in more “fat pipe” solutions with burstable ability to interconnect data centers, this is becoming a market of its own, and Equinix is a place where these market forces can come together.