
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.
##
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.