SMB IT Priorities are Mostly about Remote Work Support

A survey by Analysys Mason of 1149 of small and mid-sized businesses in Germany, Singapore, the UK and the United States almost predictably suggests those firms will rely more on information technology going forward. In some part, that is because firms expect continued work from home deployments that arguably increase IT support. 

source: Analysys Mason 

Respondents expect roughly 40 percent of employees will work from home for at least some of the time once the Covid-19 crisis is over. This will drive demand for personal computers and mobile devices as well as cloud-based solutions to support remote workers and applications. 

It is probably worth noting that although many use the term “digital infrastructure” to mean connectivity networks, data centers and towers, in the SMB space it is devices and apps that are “digital infrastructure” in a practical sense, as is the case in consumer markets. 

Consumers and SMBs--no less than enterprises--use apps, services and devices. Their “digital infrastructure” is apps and devices. Only on the producer side of the value chain is there a distinction made between devices, apps and “networks and data centers.”

source: Analysys Mason 

From an SMB perspective, IT goals will be to support remote workers and protect apps and devices from hackers or data breaches. 

source: Analysys Mason 

Small firms are defined as having one to 99 employees while mid-sized firms have 100 to 999 employees.

Most Institutional Investors Will Hold Digital Infrastructure Assets

institutional investors now view tower and other digital infrastructure assets in the same way they once viewed real estate holdings. Traditionally, real estate was viewed as an asset with predictable and strong cash flows and a lower correlation with equity markets. Also, such assets are believed to be more protected from inflation. 

source: OECD

In other words, institutional investors now view digital infrastructure in the same way they view transportation, energy and other utility assets. 

Infrastructure assets are commonly used to diversify portfolios. 

As with utilities, barriers to competition were important. Over the past few decades, digital infrastructure assets have also been “de-risked” to a large extent, moving them closer to the traditional real estate model. 

source: Schroders 

In search of yield, infrastructure investors also are taking a more-active stance in management, where they might previously have limited their scope to investment-only approaches. Some 80 percent to 90 percent of institutional investors express interest in digital infrastructure assets.  

Though some digital infrastructure investors are active only in “hard” assets such as towers, data centers and networks, others view the broader ecosystem as including applications and services plus devices. 

source: Asian Infrastructure Investment Bank

That view of “hard and soft” is essentially “tangible and intangible” parts of the infrastructure ecosystem. 

source: LBBW

Telco Infra Suppliers Slowly Change

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. 

source: MTN Consulting 

source: Statista 

Huawei continues to lead annual sales, followed by Nokia and Ericsson. 

source: MTN Consulting 

How Metaverse Drives Data Center, Connectivity Investments

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. 

source: iCapital Network 

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.

FTTH Network Element Deveolopments Change Cost, Architecture Possibilities

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. 

source: Corning

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.

 

source: Corning

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. . 

source: Utechnoworld

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. 

Cox Boosts Speed on its "Most Purchased" Tier to 250 Mbps

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. 

source: Openvault 

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.

Hybrid Work Might be a Necessary Enteprrise Compromise

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. 

source: AT&T 

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. 

source: AT&T 

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. 

source: AT&T 

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.