Cisco Predicts Fourfold Traffic Increase by 2014, Claims to Have Solutions
Cisco Predicts Fourfold Traffic Increase by 2014, Claims to Have Solutions
  • Korea IT Times
  • 승인 2010.06.09 14:45
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Cisco VNI summary - video will drive IP traffic growth

This year's VNI by Cisco's service provider marketing group continues to project high IP traffic growth due primarily to video, with only slight variability from last year's VNI forecast. Worldwide IP traffic for 2009-2014 will grow at a CAGR of 34%, an increase of 4.3x from 2009 levels. Business traffic's share of total traffic will decline from 21% in 2009 to 13% in 2014, reflecting the "prosumer" trend. VNI has proven to be a useful tool for Cisco to bolster its technology and business vision and roadmap.

The very antithesis of "build it and they will come": they are coming, but who will build it

Prior to releasing the Visual Networking Index, Cisco executives hosted their first-ever quarterly business update call with industry analysts to outline Cisco's strategy and vision for the service provider market. They described a "two-sided" business model based on B2B2C (business to business to consumer) where technology-enabled end users are willing to pay for personalized services that service providers are in a position to provide. But traditional network service providers (NSPs) need to ask where their revenues will come from in two years, and be willing to abandon traditional telco business models and embrace new ones to drive revenue growth. Cisco's evolving IP NGN vision posits that "the network is the platform" that integrates cloud services, the IP network, and client devices to deliver a unique user experience. Cisco implied that NSPs should partner with OTT players for mutual advantage to profitably meet end-user expectations for personalized services. Cisco's service provider technology strategy is to supply IP equipment that can not only operate "north to south" (i.e. core to access), but also "east to west" (i.e. data center to data center), supporting a content delivery network (CDN) that caches video content closer to end users and adds network intelligence. These cloud-based content delivery networks can be wholesale business offers that turn OTT players into valued partners, completing the B2B2C value chain. Thus, this is Cisco's answer to who will pay for IP video traffic growth: the OTT players.

Cloud-based CDNs from network service providers are already emerging; for example, AT&T's managed cloud for Blizzard Entertainment to meet the stringent performance expectations of gamers playing "World of Warcraft." While not yet vetted with web-based content providers, the proposal is that they will shift from building their own computing networks to using CDNs based on the NSPs' managed clouds with Cisco's infrastructure equipment.

Cisco's VNI provides the foundation for its network vision and roadmap

Cisco has a history of making the right calls and steering market opinion, both of which are key credentials for gaining customer mindshare. It may not always have the best-of-breed NSP products and is certainly not a price leader, but its market vision and roadmaps are hard to beat. Service providers have long-term expectations for their capex investments, so they value vendors that are good strategists. With an increasingly crowded service provider IP routing market, Cisco hopes its vision will provide a competitive edge. And, as a rising tide raises all ships, Cisco's IP router competitors (Juniper, Alcatel-Lucent, Huawei, Tellabs, Ericsson, ZTE, etc.) haven't disputed Cisco's past VNI forecasts, nor do we expect they will now.

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