We are now approaching a new year and a new budgetary cycle for just about everyone. That makes it a good time to look ahead, and I want to start that now by looking at three examples of important future trends. I’ll use a specific company/product to highlight each trend.
The first trend is the transformation of the cloud, and the company I’m using as a bellwether is IBM. Cloud computing is probably the most misunderstood transformation in all of information technology, and one of those who apparently misunderstands is IBM, whose success at navigating past transformations in IT is legendary. Somehow they’ve missed this one, but they’re not alone.
Everything isn’t going to the cloud, no matter what the hype has said, but the cloud is still going to touch nearly everything. The important truth we’re now starting to see in regards to cloud computing is that cloud services will be used as a front-end adjunct to traditional IT, which will still run largely where it always has—in data centers. The Internet and the mobile/smartphone revolution has utterly transformed information access and customer/partner relationships, but the core applications on which most businesses are based have been remarkably stable for years. Yes, users want more processing capacity, and yes, they want to spend less money, but what they do with these core applications has stayed largely the same.
What this means is that business cloud computing is hybrid cloud, with the cloud part creating an agile multi-device relationship with both the companies’ employees and with the outside world. New cloud stuff is tacked on to old data center stuff, and that’s where IBM has issues. They’ve been the master of the mainframe data center for decades, but mainframes aren’t where front-end or cloud activity is anchored. IBM doesn’t get that, and doesn’t have the strong strategic influence where the cloud is happening.
Acquiring Red Hat could solve many of IBM’s technical problems with hybrid cloud, but only if IBM understands that a hybrid cloud hybridizes with a high-density server/software data center, and that what Red Hat does is give them a position in that kind of data center, a position IBM once had and threw away by selling off most of their server assets.
At best, even with Red Hat, IBM is behind the curve. They’re not the only one, though. The fact is that most of the major IT firms, software and hardware, have the same blind spot. What’s saved them from IBM’s continual revenue declines is a broad hardware/software base and the ability to sell both into the data center and into public cloud providers. That saving grace works only as long as every one of these IT firms makes the same mistakes, though. If one manages to get the future of the cloud right, and supports it the right way, they bury the others.
The second of my trend/company points is the subduction of IP network features, and the firm that best epitomizes this trend is Ciena. What’s behind this trend is in a sense related to what’s behind my first trend. The Internet and smartphones have utterly transformed how people get information and entertainment. The “value” of phones and cellular or wireline services is really the value of what they connect you with. Those somethings are naturally migrating under demand pressure, and they’re migrating increasingly toward the access edge.
It’s traditional to think of the Internet as a collection of sites, but in traffic terms it’s really more like a collection of caches. We’ve cached content, particularly video, for ages, and the amount of caching going on is exploding as we move more to streaming IP in the delivery of video content and the associated ads. With edge computing, we’ll likely see a radical increase in the amount of process caching we do. IoT (if we ever get our act together) will depend on process caching.
From a traffic perspective, then, a network isn’t an Internet or a network of sites or users, it’s a network of caches. There won’t be nearly as many caches as users or sites; a country might have anywhere from a couple dozen to perhaps a maximum of 500. These caches, representing aggregated demand for something, can easily be connected using something less complex than massive-scale IP routers. In fact, the best way to connect them is to simply elevate fiber transport features a bit, creating a packet-network overlay to optics that can offer connection grooming when a full optical pipe isn’t justified. That’s what Ciena has announced and will be expanding.
If operator services are to get smarter, they need to have smarts, which means servers and software and process caches. Increasingly, then, the metro networks of the world will be linking process caches more than users, and creating what’s really a big distributed cache/edge-computing complex. “The network is the computer”, as Sun Microsystems used to say. Ciena is ready for that.
My next trend is the 5G/FTTN hybrid replacing wireline broadband, and the firm that embodies this most is Verizon. There are multiple reasons why this trend is important, perhaps critical, and the fact that this trend reinforces my other two trends is reason in itself to be following it next year.
One of the biggest challenges in all of networking is pass cost, the cost of being able to make a quick connection to a customer’s site from aggregate facilities you’ve already deployed in the area. Cable companies in the US, who ran CATV cable along nearly every street during the heady time when cable TV was the profit engine for wireline connectivity, lucked out by deploying something that happened to be capable of supplying high-speed digital broadband, including Internet access. For the telcos, whose twisted-pair in-the-ground infrastructure doesn’t have nearly the upside in capacity as CATV, things were looking ugly. Fiber to the home (FTTH) has way more potential capacity than cable, but it has a pass cost that’s very high because you have to run it down every street you hope to connect customers to.
The 5G/FTTN hybrid works by putting a node somewhere in a neighborhood, then using 5G millimeter-wave radio to connect to the home. In some areas, operators tell me they can cover a square mile or more with a single node, which could be anywhere from a hundred to well over five hundred homes or small businesses, and more apartments if you have areas where they’re concentrated. The cost to prep such a neighborhood is the cost of one 5G/FTTN node, which operators say would be less than a fifth the pass cost of FTTH. In fact, it wouldn’t be much more than the pass cost of cable broadband.
Streaming IP video is the automatic consequence of the 5G/FTTN hybrid, and so its deployment will forever shift the TV dynamic. Verizon will take years for its new home broadband model to eclipse FiOS’s FTTH, but long before the new approach dominates, Verizon will have to decide whether it will try to stay in the business of live TV or partner (as it has with its early 5G/FTTN deployments) with another streaming TV provider.
Streaming TV and ad insertion on the fly will, of course, radically increase the need for edge caching and radically accelerate the network-of-caches model that reduces reliance on routing and increases the value of groomed optical networks.
It’s tempting to see “carrier cloud” lurking behind all of these trends in some way, but that’s muddling cause and effect. Technology doesn’t drive markets, demand/opportunity does. What technology can do is facilitate the addressing of opportunities in new ways. Carrier cloud is a facilitation, primarily of changes in video and advertising. Those changes will also promote process hosting, and they’re driven by the need to improve broadband speeds and economies. That doesn’t mean that the broad topic of carrier cloud is irrelevant, only that we’re approaching it through a series of seemingly unrelated moves. It may not be the most efficient way to do things, but it will get the job done.