The Evolution of the Metro Network and DCI

What exactly is the data center interconnect (DCI) opportunity, and how does it relate to cloud computing, SDN, NFV, and the cloud?  That’s a question that should be asked, isn’t asked often, and might have a significant impact on the way we build the most important part of our network.  Obviously it’s going to have an impact on vendors too.

Microsoft kicked this off by announcing an optical partnership with Inphi that would allow direct optical coupling of data center switches, eliminating the need for a separate device.  The result, according to Wall Street, was bad for Infinera because DCI was considered a sweet spot for them.  Infinera isn’t an enormous company so it’s reasonable to expect that any alternative to the Infinera DCI approach would be a threat.  It’s also reasonable to say that direct optical connection between data center switches could cut out a lot of cost and disrupt the DCI market.  Does that matter?

DCI doesn’t make up more than about 7% of metro optical deployment today, and while it’s a growth market in terms of enterprise services, the growth doesn’t compare with what could be expected (under the right circumstances) from other opportunities.  Metro networking is the hotbed of change, not only for optical equipment but also for new technologies like SDN and NFV, and for new services like cloud computing.

Let’s start with enterprise.  We have today about 500 thousand true enterprise data center locations worldwide.  As these businesses migrate to hybrid cloud (which the great majority will do) about 40% of them will want to have cloud-to-data-center connectivity at a bandwidth level that justifies fiber connectivity.  Not only does that generate about 200k connections, it also encourages public cloud providers to distribute their own data centers to be accessible to enterprises in at least the major metro areas.  My model says that we’d see a major-metro distribution of over 1,500 cloud provider data centers generated from hybrid cloud interest.  All of these get connected to those 200k enterprise data centers, but they also get linked with each other.

Mobile broadband is another opportunity, by far the biggest already and still growing.  Today it accounts for about 55% of all metro fiber deployment, and that number is going to increase to over 65% by 2020.  In technology evolution terms, more and more of mobile fiber deployment is associated with video caching, which is a server activity.  This is shifting the focus of mobile-metro from aggregation to content delivery, from trunking to connecting cloud data centers.

Service provider shifts to NFV would generate an enormous opportunity.  Globally, as I’ve said before, it could add over a hundred thousand data centers, and all of the centers within a given metro area would likely be linked to create a single resource pool.  My model says that this could generate well over 3 million links globally, which is a lot of DCI.  The question, of course, is just how far NFV will deploy given the lack of a broad systemic vision for its deployment.

IoT and contextual services would help drive metro data center deployments, and my model says that the same traffic and activity factors that would justify the 100k NFV data centers are accented by IoT and contextual services.  Thus, the two drivers would tend to combine to create a large distributed pool of servers, the very kind of thing that would be likely to need more interconnection.  That means that our 3 million links would, under the influence of IoT/contextual evolution, rise to nearly 4.5 million.

Ironically, metro shares NFV’s lack of an ecosystemic focus.  While all the drivers of metro deployment may be evolving toward connecting data centers, the largest driver (mobile broadband) is not only still focused on traffic aggregation, it’s often planned and funded independently.  The very fact that everything converges on metro means that metro is responding not only to different mission pressures (converging or not) but also different administrative/business goals.

Still, there are some things we can see as common metro requirements.  Even DCI missions are surely going to consume multiple optical pathways, and physical meshing of large numbers of data centers would be expensive in terms of laying glass.  A smarter strategy would be to groom wavelengths (lambdas) optically so that you could create low-latency-and-cost pathways that hopped from fiber strand to fiber strand as they transited a metro area.  We’re nearly at the point where DCI could justify this approach.

The “virtual wire” model that I’ve been talking about as a union of optical and SDN-forwarding elements at the electrical layer would evolve out of this approach, and could also in theory drive it.  At the end of the day, lambdas versus SDN paths is a matter of transport bandwidth utilization and relative cost.  You could see an evolution from SDN-virtual-wire to lambda-virtual-wire as traffic increased, or you might see one or more of my previously cited drivers develop fast enough to skip the SDN stage.

The deciding factor here isn’t going to be DCI but metro broadband.  We’re investing a lot of money in metro broadband backhaul already, and 5G and content delivery will increase this.  If operators build out backhaul quickly then they’ll commit to infrastructure decisions before services are highly data-center-focused, and we’ll probably see more SDN deployment besides.  This would combine to keep DCI and mobile broadband from coalescing into a common technical model.  If we were to see CDN focus or one of the other drivers develop, we might see DCI win it all.

That’s really why near-term wins and losses in the DCI space are important.  We may not see any of the drivers I’ve cited develop quickly, and we may then see DCI remain a specialized enterprise-service or IaaS-public-cloud-infrastructure element.  We might also see cloud data center deployment explode, DCI links explode even more, and the whole scheme displace all other metro applications.  That would be huge for operators, and for vendors.

Optical vendors, or at least pure ones, could do little to drive things here because all the compelling drivers of metro evolution lie in accelerating network operator use of the cloud—things like NFV and IoT.  What they could do, technically, is to focus on creating lambda-virtual-wire options and means of evolving to them from SDN-virtual-wire.  Some will see that as being dependent on the optical standards of OpenFlow from the ONF, but we should know by now that low-level specifications aren’t going to drive market transformation.  It may be that a generalized virtual-wire model that works for optics and SDN, and that can be operationalized in concert with all the evolving drivers of data center deployment, are what will win the day, for somebody.