One of the great lessons of the internet crash was that the exponential growth in internet activity did not mean a similar level of growth in revenues for many of the new business models which were hyped. I can remember an insightful report before the crash which added up all the expected top-line growth projections and concluded that household expenditure on internet services would have to amount to 30% to 40% of household expenditures if projections were to be met!! Although on a personal basis household expenditure on internet access does seem to be growing all the time, it’s not at anything like the growth in our usage. Not yet anyway!
The graphs below shows the growth in global internet traffic from 2001 to 2012 according to Cisco, split by IP, fixed and mobile internet traffic. Although not on the same scale but in a similar vein, the lower graph shows the monthly peering traffic recorded over the Amsterdam Internet Exchange from July 2001 to May 2014
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For reference, gigabyte/terabyte/petabyte/exabyte/zettabyte/yottabyte is a kilobyte to the power of 3, 4, 5, 6, 7 and 8 respectively.
According to the latest projections from Cisco in their report this month “ The Zettabyte Era – Trends and Analysis”, global IP traffic will surpass the zettabyte threshold by the end of 2016 growing by approximately 20% per annum. Global IP traffic has increased fivefold over the past 5 years, and Cisco predicts an increase of threefold over the next 5 years.
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The graph below illustrates the changes in devices used to access the internet behind Cisco’s projections.
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The report highlights a number of core trends including the following:
1) Transition to newer devices will alter network demand and usage.
2) M2M growth will drive the internet of everything.
3) Fixed broadband speeds will nearly triple by 2018.
4) Wi-Fi will dominate access technology.
5) Metro traffic will grow nearly twice as fast as long-haul traffic.
6) IP video will accelerate IP traffic growth through 2018.
7) Bottlenecks may result between peak and average demand times.
Bring on the yotta era!
This blog represents my personal views and is not reflective of the views or opinions held by any company or employer I work for currently or have worked for in the past. The views expressed herein are based solely upon publicly available data. No views expressed herein should be taken as an endorsement to take any particular course of action in the markets. The basis of this blog is that different views should be expressed and readers make up their own minds on the what they believe and act accordingly.
deconstructingrisk 
Which leaves the question: will these yottabytes be equally distributed among users (think video for example) or not :-), ie will we have net neutrality or do some videos for example get preferred treatment ? I think the jury is still out on that one.
Eddie
PS: Been quite busy lately (should get better now !) and right now on holiday, but rest assured that I follow your musings closely.
Thanks Eddie & have a great holiday
I have been also very busy lately and combined with the good weather and the world cup, I have been neglecting my blogging duties. Just thrown last few blogs together! Need to get it together as proper blogging takes effort….but in the interim Brazil vr Chile is on…
On telecom, I think the age of fast lanes & preferred traffic is inevitable, that’s why I like the assets of Level3 and now TWTC! Been wrong on this space before though…
M
This reminds me of something Kostolany said long time ago.
Whenever there is a new innovation (think electricity, railroads or the Internet) there are three waves. During the first wave there is a ton of innovation and most concepts don’t survive. During the second wave things become more balanced but still a significant number of ideas resp companies don’t make it. The real champions come out of the third wave.
I don’t track telcos closely. Regarding the internet, though, we should see the third wave right now (the first ended 2002, the second 2008).
Eddie
Great post thankyyou