Some changes in telco infrastructure sales in any given year in the fraction of a percent range would not surprise anyone. What might be notable is Amazon appearing in the top 10 of infrastructure suppliers with share gains in the top four.
As you might expect, given the shift to open source and virtualized platforms traditional suppliers lost a bit of share. Ericsson, Nokia and Huawei all lost share in 2021.
Huawei continues to lead annual sales, followed by Nokia and Ericsson.
Gary Kim has been a digital infra analyst and journalist for more than 30 years, covering the business impact of technology, pre- and post-internet. He sees a similar evolution coming with AI. General-purpose technologies do not come along very often, but when they do, they change life, economies and industries.
As video content distribution has shaped global demand for inter-continental data transport and high-speed connections between major data centers, the metaverse will shape data center and connectivity network requirements. And the key words are “more” and “less.”
“Making the metaverse a reality will require significant advancements in network latency, symmetrical bandwidth and overall speed of networks,” says Dan Rabinovitsj, Meta VP for connectivity.
The metaverse “will require innovations in fields like hybrid local and remote real-time rendering, video compression, edge computing, and cross-layer visibility, as well as spectrum advocacy, work on metaverse readiness of future connectivity and cellular standards, network optimizations, improved latency between devices and within radio access networks (RANs), and more,” he says.
Already, experts predict Metaverse environments will require more data centers, more edge computing, more distributed computing, more collocation, more content distribution mechanisms, will require more power consumption and more cooling.
Eventually, fully-developed metaverses will require advances in chip technology as well. Beyond all that, blockchain will probably be necessary to support highly-decentralized value exchanges. And it is impossible to separate metaverse platforms and experiences from use of artificial intelligence, for business or consumer uses.
If metaverses are built on persistent and immersive computing and tightly-integrated software stacks, platforms will be necessary. New developments in chip manufacturing also will be needed.
For connectivity providers--especially internet service providers--far lower latency will be key. Today’s latency-sensitive applications such as video calling and cloud-based games have to meet a round-trip time latency of 75 milliseconds to 150 ms. Multi-player, complex games might require 30 ms latency.
“A head-mounted mixed reality display, where graphics will have to be rendered on screen in response to where someone is focusing their eyes, things will need to move an order of magnitude faster: from single to low double digit ms,” says Rabinovitsj.
Image rendering will require edge computing. “We envision a future where remote rendering over edge cloud, or some form of hybrid between local and remote rendering, plays a greater role,” he adds. “Enabling remote rendering will require both fixed and mobile networks to be rearchitected to create compute resources at a continuum of distances to end users.”
Bandwidth could increase by orders of magnitude over what is required to view 720p video on a standard smartphone screen. That might work with just 1.3 Mbps to 1.6 Mbps of downlink throughput.
But a head-mounted display sitting just centimeters from the eyes required to display images at retina grade resolution will need to be many orders of magnitude larger, he notes.
To be sure, most of what happens that is part of metaverse experiences rests on things that happen up the stack from computing and communications.
source: Constellation Research
But we already can see how metaverse support will require changes in computing architecture and network capabilities.
Gary Kim has been a digital infra analyst and journalist for more than 30 years, covering the business impact of technology, pre- and post-internet. He sees a similar evolution coming with AI. General-purpose technologies do not come along very often, but when they do, they change life, economies and industries.
For a variety of reasons--higher government subsidies; higher consumer demand; higher interest by institutional investors in digital infrastructure assets; evolution of the network elements and a change in financial return assumptions--fiber to the home has an investment profile that is higher than it used to be.
On the network cost front, some sort of subtle changes in network element features also play a role.
Telco outside plant architectures were strict “star” designs in the copper era. Though network designed used multiplexing as much as possible, the basic design was a star.
But there are some changes that can affect fiber to home construction cost. Corning, for example, touts the use of its connectors that do not require splicing. Since labor--not materials--represent the biggest portion of FTTH network construction, total costs should be lower when less labor is required.
Still, materials costs are different when an architecture that is more like a “bus” or “tree” and less like a “star” is possible. For terrestrial networks using cables, the advantage of the bus is less cabling bulk.
Telco FTTH networks can use architectures that are partly bus and partly star. The advantage includes some savings on cable, as is true for bus designs.
In Corning’s case, connectors that eliminate splicing are not just a way to speed construction, they also allow more hybrid architectures that are more like buses in the trunking part of the network (which allows more sharing and multiplexing) while retaining the star for distribution to end points. .
The practical implications for FTTH network construction is that costs should be lower than they have been in the past. That, plus changes in consumer demand (higher) and government subsidies (also higher) plus higher demand on the part of institutional investors for digital infrastructure assets as a form of real estate, are propelling faster investment in FTTH in the U.S. market.
Gary Kim has been a digital infra analyst and journalist for more than 30 years, covering the business impact of technology, pre- and post-internet. He sees a similar evolution coming with AI. General-purpose technologies do not come along very often, but when they do, they change life, economies and industries.
With attention on U.S. headline home broadband speeds of 2 Gbps to 5 Gbps, it is easy to overlook the fact that most consumers do not buy services operating at the headline speeds.
In fact, at Cox Communications, a cable company with customers concentrated in metro areas, the most-popular service tier had offered speeds up to 150 Mbps. But Cox now has boosted speeds on that tier by 67 percent to 250 Mbps at no extra charge.
That is part of the typical pattern, where speeds for the most-purchased tiers increase, while prices generally remain the same, with inflation increases being the main changes in posted retail prices.
Cox has committed to boosting its top tier service to 10 Gbps over the next few years. As speeds at the top grow, so will speeds on the other tiers below.
In the fourth quarter of 2021, for example, roughly 70 percent of U.S. home broadband customers purchased services operating between 100 Mbps and 400 Mbps, generally measured using Wi-Fi-connected devices.
That of course means the internet service provider connection delivered to the home ran faster than those measured speeds.
Those sorts of tests also are important because end user experience is dictated as much by in-home Wi-Fi performance as it is by what the ISP is actually delivering to the home. User experience also is shaped by the purchasing decisions consumers make.
It is one thing to describe the speeds consumers choose to purchase; it is another thing to describe what speeds they are able to get. The former is consumer behavior; the latter is network performance.
Gary Kim has been a digital infra analyst and journalist for more than 30 years, covering the business impact of technology, pre- and post-internet. He sees a similar evolution coming with AI. General-purpose technologies do not come along very often, but when they do, they change life, economies and industries.
A study conducted by Incisiv for AT&T suggests permanent changes in work venues, though fully-remote work might be less common than many project, as work moves “back into the office” by 2024.
Such changes matter for all larger enterprises, but also will affect internet access provider, mobility and fixed network capital investment and other priorities. If there are fewer workers at large company sites, on average, demand for bandwidth and other connectivity support will diminish, from expected prior levels.
Conversely, network support in suburban areas during daytime hours should remain higher than originally foreseen. Growth in demand for mobile internet access also could be affected, if fewer workers, on average, are traveling back and forth from office sites and out and about less often.
Much will depend on whether employees or employers get their way, as there is a huge difference of opinion about the desirability of in-office work.
Employees prefer remote work over office work, while employers prefer in-office modes.About 86 percent of employees want a distributed model while 64 percent of employers do not want a distributed model.
So much hinges on which view prevails. In fact, it might be fair to note that executives hold inherently contradictory views about the future of remote work. On one hand, 91 percent believe remote work will decrease by 2024. That makes sense if even some workers return to the office, in hybrid deployments.
And while 70 percent of executives believe hybrid will be the default, 58 percent also believe employees “have not been innovative” in distributed work modes. Also, about 40 percent of executives say their ability to maintain company culture, using distributed basing, has been diminished.
More than half of non-executive workers believe company culture has been negatively affected by enforced remote work.
Of non-executive personnel, about 42 percent say maintaining company culture will be harder in a hybrid environment.
Given the conflicting views, it might be safe to say that we presently have imperfect knowledge of how work venues might change in coming years. If enforced remote work is no longer necessary, there should be some movement back to office basing, at least part of the time.
But employees will resist. And CxOs are likely to continue insisting they lack oversight of employee performance when workers are remote. “Hybrid increasingly will be the compromise.
Gary Kim has been a digital infra analyst and journalist for more than 30 years, covering the business impact of technology, pre- and post-internet. He sees a similar evolution coming with AI. General-purpose technologies do not come along very often, but when they do, they change life, economies and industries.
“Demand for data centers by global investors remained robust in the second half of 2021, with record-breaking merger and acquisition activity,” according to CBRE. “Nearly 95 percent of respondents to CBRE’s 2022 Global Data Center Investor Sentiment Survey, many of whom are the world’s largest institutional real estate investors, plan to increase their capital deployment in the data center sector,” says CBRE.
In North America alone, transactions included:
American Tower’s acquisition of CoreSite for $10.1 billion.
Blackstone’s acquisition of QTS for $10 billion.
Cyxtera’s SPAC merger with Starboard Value Acquisition Corp, valued at $3.4 billion.
Mapletree’s acquisition of the Silas Realty Trust Portfolio of 29 data centers for $1.3 billion.
Prudential & Digital Realty’s joint venture sale of 10 powered shell data centers for $581 million.
DigitalBridge’s Vantage SDC acquisition of CA22, a 24 MW hyperscale data center, for $539 million.
Already in 2022, North American transactions include:
KKR & Global Infrastructure Partners acquisition of CyrusOne for $15 billion.
DataBank’s acquisition of four CyrusOne data centers in Houston for $670 million.
In the Europe Middle East Africa market, 2021 transactions include:
IPI Partners acquired the dominant Nordic operator Digiplex.
Iron Mountain acquired a turnkey facility in Frankfurt from Keppel Data Centers for €76 million.
Antin Infrastructure Partners acquired leading U.K. managed-services provider Pulsant.
Azrieli purchased colocation operator Green Mountain in Norway for 7.6 billion NOK.
Blackstone acquired a triple-net facility leased to Equinix in London Docklands for £196.5 million.
Keppel DC REIT acquired two triple-net facilities, one in the Netherlands and the other in the U.K. for a combined total of more than €100 million.
Digital9 Infrastructure acquired Verne Global, a dominant Icelandic colocation provider for £231 million.
AtlasEdge, the recently formed edge operator backed by Liberty Global, Digital Bridge and Digital Realty, acquired a portfolio of 12 assets from Colt Data Centers.
In 2022, transactions in EMEA include:
KAO Data, backed by Legal & General Capital, Goldacre and Infratil, have acquired two data centers in West London via a sale and partial leaseback.
Digital Realty agreed to acquire a majority stake in Teraco, Africa's leading carrier-neutral colocation provider, from a consortium of investors, including Berkshire Partners and Permira, as well as Medallion Data Centres in Nigeria.
In the Asia-Pacific region, 2021 transactions include:
Vantage Data Centers and lead investor DigitalBridge acquired Hong Kong-based PCCW and Agile Data Centers.
GLP acquired a 50% stake in Songjiang Internet Data Centre in Shanghai.
Digital Edge acquired five data centers in Japan for $230 million.
Equinix entered the India market through the acquisition of GPX India.
Already in 2022, APAC transactions include:
Equinix $525 million joint venture with GIC in South Korea.
Keppel Capital to close $1.1 billion data center fund.
Mitsui announced intention to invest $2.7 billion to develop data centers in Japan.
GLP announced plans to develop 900 MW of data centers across Tokyo and Osaka and totaling $12 billion.
In Latin America, 2021 transactions include:
Piemonte Holding acquired Globo’s Data Center in Rio de Janeiro.
Squared Capital acquired KIO Networks, a leading data center operator in Mexico.
Goldman Sachs Asset Management invested in Piemonte Holdings' Brazilian edge data center platform Elea Digital.
EllaLink and Equinix delivered the first undersea cable between Europe and Latin America.
In Latin America, 2022 transactions include:
Equinix opened a hyperscale facility in São Paulo and announced plans for two more in Mexico City and another in São Paulo.
Ascenty launched two data centers in Rio de Janeiro and Hortolândia.
DigitalBridge-owned Scala Data Centers began construction on two hyperscale data centers in Brazil, with one fully leased to a cloud provider.
Tencent Cloud launched its first Brazilian data center.
Ascenty plans to build its fourth data center in São Paulo.
Microsoft announced plans to establish a Chilean data center region.
Gary Kim has been a digital infra analyst and journalist for more than 30 years, covering the business impact of technology, pre- and post-internet. He sees a similar evolution coming with AI. General-purpose technologies do not come along very often, but when they do, they change life, economies and industries.
With the caveat that the situation could change, office vacancies in major U.S. cities appear to be rising. Should that pattern continue, it would tend to confirm the notion that permanent work from home and hybrid work modes could become a permanent reality.
That, in turn, could mean fewer workers in the office at any given time; fewer workers eating in local restaurants or taking public transportation; shopping downtown or parking.
Lower office utilization also implies fewer people using communications and gear at the office; less use of mobile communications downtown and more distributed usage of internet access and applications across metro areas.
Aside from financial pressure on owners of office real estate; restaurant and retail shop owners; transit systems and parking lots, suppliers of business software and connectivity services will see changes.
If network usage flattens in urban cores and increases in suburban areas, capital investment requirements could shift as well. There could well be less urgency for upgrades of downtown cell sites and more diffuse demand for upgrades across broader suburban areas, with fixed network broadband becoming an even more important mobile capacity offloading platform.
Both mobile and fixed network demand peaks for “work” reasons could flatten a bit. App security will be a bigger issue as more workers work remotely, routinely. People might move away from urban cores to outlying areas, again changing the geographies where additional capacity has to be added.
Gary Kim has been a digital infra analyst and journalist for more than 30 years, covering the business impact of technology, pre- and post-internet. He sees a similar evolution coming with AI. General-purpose technologies do not come along very often, but when they do, they change life, economies and industries.
