In the first part of this article, the remarkable 26% CAGR that the latest Cisco VNI report is predicting for 2017-2021 was noted. A 26% CAGR is steep in any field let alone the already massive Internet that exists today. Perhaps the most important observation was that the growth rate is accelerating. This part will look at some of the shifting patterns for Internet traffic as seen in the study. Here are the key observations for this part of the article: (1) Traffic is moving closer to the edge; (2) regional traffic trends are uneven; (3) business continues to invest in ways to segment traffic from the public Internet and that the fastest such area of growth is SD-WAN.
Moving toward the edge
With the widespread availability of content delivery networks (CDNs) and related caching technologies, the volume of IP traffic traversing long-haul networks should be declining. Much of this traffic growth is video. In fact, the Cisco VNI study predicts that video will represent 80% of all Internet traffic by 2021, up from 67% in 2016. Globally, there will be nearly 1.9 billion Internet video users (excluding mobile-only) by 2021, up from 1.4 billion in 2016. Much of this content works well in a CDN. However, currently there are a handful of super-sized Internet content providers (ICPs) that are operating a fairly small number of hyper-scale data centres. Facebook, for instance, serves over a billion daily users, with major European data centres located near the Arctic Circle in Luleå, Sweden. Because Facebook feeds are customised for user, each session for European users pretty much ensures that traffic is traversing the core network and long-haul backbone. The story is pretty much the same for AWS, Google and Microsoft. However, each of these ICPs is undergoing a rapid build-out of data centres, meaning more facilities closer to users. By late 2018, Facebook should have three European data centres in operation (construction of two new Facebook data centres is underway in Clonee, Ireland and Odense, Denmark). By 2021, it is likely that Facebook could have five or six European data centres. This alone would redirect significant traffic off the long-haul network to northern Sweden and onto more regional networks.
Below are some key Cisco VNI findings:
· End-user Internet traffic is moving closer to the edge; over one-third of traffic will bypass core by 2021.
· Globally, 35% of Internet traffic will be carried metro-to-metro by 2021, up from 22% in 2016.
· Globally, 23% of Internet traffic will be carried on regional backbones (without touching cross-country backbones) by 2021, compared to 20% in 2016.
· Globally, 41% of Internet traffic will traverse cross-country backbones by 2021, compared to 58% in 2016.
The second observation is that regional differences in IP traffic growth will remain with us in 2021 and likely for more years in the future. Even though the latest mobile phone models somehow spread to cities all around the world remarkably fast, global economic development is uneven and network infrastructure reflects it. By 2021, 5G rollouts will be underway in many countries with robust economies but will come later to others. The figures gathered by the Cisco VNI, show the APAC region leading with the greatest IP traffic load by 2021, North America follows, but with a much smaller population compared to APAC, per capita bandwidth intensity remains highest in North America. The Cisco VNI figures, specifically regional IP traffic growth 2016 – 21, show:
• APAC: 107.7 exabytes/month by 2021, 26% CAGR, 3.2-fold growth.
• North America: 85 exabytes/month by 2021, 20% CAGR, 2.5-fold growth.
• Western Europe: 37.4 exabytes/month 2021, 22% CAGR, 2.7-fold growth.
• Central Europe: 17.1 exabytes/month by 2021, 22% CAGR, 2.75-fold growth.
• Latin America: 12.9 exabytes/month by 2021, 21% CAGR, 2.6-fold growth.
• Middle East and Africa: 15.5 exabytes/month by 2021, 42% CAGR, 5.8-fold growth.
Business IP traffic volume
The latest Cisco VNI report also predicts that global business IP traffic will grow at a CAGR of 21% from 2016 to 2021. Since this figure is based on current metrics from Cisco’s service providers (as well as other sources as discussed in the study’s methodology), it is clear that networks are filling up and that they are doing so at an accelerated rate. More businesses are sending/receiving traffic to the Internet, mostly likely due to increased use of video and accessing cloud services over the public Internet. Cisco expects advanced video communications in the enterprise segment to cause business IP traffic to grow by a factor of 3 between 2016 and 2021.
The Cisco VNI report has a separate category for IP WAN, which is predicted to grow at a CAGR of 10%, compared with a CAGR of 20% for fixed business Internet and 41% for mobile business Internet. This category could include Layer 2 and VPN services. Increasing numbers of service providers are offering direct connection options for AWS and Microsoft Azure, and as the general movement of corporate data into the public clouds increases, one would expect that the traffic load on these private connections to grow substantially. However, Cisco is predicting business IP traffic in North America to grow at a CAGR of 23%, a faster pace than the global average of 21%. In volume terms, in Asia Pacific will have the largest amount of business IP traffic in 2021, at 17 EB per month, with North America second at 14 EB per month.
One area of intense activity now being tracked by Cisco VNI is global enterprise SD-WAN traffic, which is now predicted to grow at a CAGR of 44% compared to 5% for traditional WAN. Cisco predicts that SD-WAN will increase six-fold over the forecast period and represent 25% of WAN traffic by 2021. This is good news for Cisco, given that it recently agreed to acquire Viptela, a start-up specialising in SD-WAN, for $610 million in cash and assumed equity awards. Cisco’s SD-WAN portfolio also includes its home-grown intelligent WAN (Iwan) solution and Meraki cloud platform.
