Industry executives and experts share their predictions for 2018.  Read them in this 10th annual VMblog.com series exclusive.

Contributed by Mike Nguyen, CEO of Inflect, Inc.

The Changing Face of Connectivity: 2018 Will Bring a New Era of Networking

Never before has our world relied on the internet more than it does today, and we're just scratching the surface. Internet infrastructure is, well, pick your favorite corporal analogy (apologies, I have a degree in biology)-the backbone, the heart and soul, the lifeblood of our digital economy and modern-day society. The hardware, software and network connections that make the internet work make our world work. This will become even more true as enterprises rely more on cloud computing; as IoT and edge computing take hold; and as wireless technologies such as 5G provide exponentially greater speed and access. Our reliance on the internet will only increase as technology expands into uncharted waters and our day-to-day lives become more entwined.

As we close out a 2017 marked by massive consolidation, we look ahead to what 2018 will bring. Here are four predictions that will shape our industry.

#1: All data center providers-not just Equinix-will focus on expanding their network and cloud on-ramp density within existing locations.

Network and cloud provider availability continue to be a major decision criteria for companies when deciding which data centers to choose. The need to connect to multiple networks and clouds will become exceedingly important with the rise of IoT and the push to edge computing. Data center providers realize customers are trying to kill as many birds with as few stones as possible by choosing to colocate in data centers with large ecosystems of carrier networks, cloud providers, customers and partners. In 2018, data centers that have traditionally been marketed as high-density or compliance and regulatory focused will be aggressive at attracting networks and clouds, rebranding as highly connected sites.

#2: Network operators will roll out more services to mimic the scalability and flexibility of cloud computing.

There's a reason networking is the final technology in the data center to succumb to abstraction and virtualization: it's hard and expensive. Billions of dollars worth of old gear has to be amortized before the next gen equipment can be bought and deployed. The complexity and performance demands inherent in network operations are being overcome with the rise of the latest technologies, including Network Functions Virtualization (NFV) and Software Defined Networking (SDN). Both technologies are approaching greater commercial viability in production and gaining widespread adoption from legacy and emerging providers. Major carriers including AT&T, Verizon, China Mobile and Deutsche Telekom are virtualizing their networks with mature, open source technologies like OpenStack and with emergent lightweight options like Linux containers managed by Kubernetes. Carriers old and new are offering SD-WAN network services. Some newer networks are built from the ground-up with the latest in network virtualization, enabling network to be consumed similarly to public cloud. Megaport and Packet Fabric are a couple of the best examples.

2018 will be the year in which major network operators no longer contemplate deploying new, non-virtualized network services. The agility, composability and efficiency of virtualized network functions mean that customers will be able to buy burstable Layer 2 transport services from even the traditional network providers, just like people buy compute instances and storage with a credit card from Amazon Web Services (AWS), Google Cloud Platform (GCP) and Microsoft Azure.

#3: An international public cloud company will mount a major challenge to the Big 3 in the US.

According to Gartner Research, the global public cloud computing market reached $22.1 billion in 2016, with the US public cloud companies Amazon, Microsoft and Google commanding about 53.6 percent share of the IaaS market. But non-US companies are making headway. In fact, Alibaba (whose AliCloud public cloud service has posted near-triple-digit growth numbers this year) has already claimed the Number 3 spot in the IaaS ranking, surpassing Google. Alibaba provides access to the valuable and massive but hard to penetrate Chinese market, and other non-US companies are poised to do the same in Asia, Europe and South America.

#4: The "public cloud-minded buyer" will force a redefining of competition in the internet infrastructure landscape.

One of the most impactful ways that the hyperscale cloud providers have changed the infrastructure business is by making cloud services incredibly easy to purchase and consume. This conditions consumers to demand the same convenience from all other options in the ecosystem. This demand is creating some surprising alliances among entities previously viewed as direct competitors.

For example, QTS Realty's CloudRamp recently became the first colocation offering on the AWS Marketplace, providing a way to rapidly transition workloads to AWS and vice versa. This is an early proof point of what will soon be evident: competition will no longer be between traditional colocation and network companies and public cloud providers; instead the competition will be between the providers of sub-categories of infrastructure-colocation, IP transit, Layer 2 transport, etc. For example, it's a race between Digital Realty, Equinix, Cyrus One and others in colocation to be the easiest to buy and deploy. Investments are being made across the board to "AWSify" offerings.

All of these winds of change will make 2018 an interesting year in the internet infrastructure industry, but one principle will hold steadfast: connectivity will remain king.

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About the Author

Mike Nguyen is CEO of Inflect, Inc., a San Francisco-based startup that is building an open and neutral online platform to enable buyers and sellers of internet infrastructure services to connect, collaborate and transact. Mike has 15 years of experience in internet infrastructure consulting, successfully helping companies such as Facebook, Twitter and Twilio procure their infrastructure and grow. He saw the light and went all in on building the online platform everyone wants and needs.