Sunday, June 23, 2024

Global Capacity Networks Now Hinge on Hyperscalers, Obviously

The “hyperscale” moniker for some data centers is well earned. Though such cloud hyperscale data centers represent a fraction of all data centers--measured by energy consumption--they might conduct more than 95 percent of all compute instances. 


And while connectivity demand is generally driven by data centers these days, it is the connections between hyperscale sites and the internet points of presence that arguably are most vital. 

source: Goldman Sachs 


By definition, the global “backbone” networks connect major traffic sources with each other, and not consumers directly at the local level. And even allowing for some overlap (data centers require local access connections to internet points of presence; major backbone networks and other data centers), it by now is obvious that data centers drive capacity requirements of the global capacity networks. 


Capacity Segment

Percentage of Demand

Hyperscale Data Centers

50-60%

Traditional Data Centers

30-40%

Telco Voice Switches (legacy)

5-10% (decreasing)

Wide Area Network (WAN) Backbone

20-25%

Shorter Connections to Internet Points of Presence (PoPs)

10-15%


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