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SP360: Service Provider

On Tuesday, Wednesday and Thursday, we covered the findings of the 2010 Cisco VNI Usage Study - but today is a little different.  Come on, I know you.  We’ve been together in this corner of the blogosphere for awhile now…and I know you’re already looking ahead to the weekend (as am I, my Zettabyte-loving buddies). So in that anticipatory spirit, I think it is fitting that this final post on this study be forward-looking as well.

True, I did say in the first post, that Cisco VNI Usage is focused on the current trends while the Cisco VNI Forecast is focused on the future traffic growth over the next half decade -- but these distinct research platforms are really more complementary than siloed.  That’s because we actually use the VNI Usage findings to help shape and refine the input assumptions for our VNI Forecast model.  Combined with ever-changing third-party subscription growth forecasts, VNI Usage guidance and validation helps us maintain the high level of credibility that our Forecast receives (per frequent and in-depth scrutiny from regulators and our customers).

Here are our main takeaways from the Cisco VNI team as we start to do advance work on the next revision of our Forecast:

When the two Cisco VNI research platforms are compared, there are several striking similarities:

  VNI Forecast VNI Usage
GB of Internet Traffic per Month per Connection in 2009 (Q3) 11.8 11.4*
GB of Internet Traffic per Month per Connection in 2010 (Q3) 15.6 14.9*
Growth in Internet Traffic per Month per Connection from 2009-2010 31.5% 30.7%*

The comparatively slight differences between VNI Usage results and VNI Forecast projections can be attributed to the source of the contributed  VNI Usage data (a random sampling of more than 20 global service providers), while the VNI Forecast effort is designed to be a comprehensive, worldwide model.  If we were to do a weighted average of providers based on the total number of broadband lines in their region, the VNI Usage numbers would likely be much higher as developed countries tend to consume more bandwidth than those countries with less developed infrastructure -- but regardless, we were quite pleased to see the independent efforts come out so closely.

The Cisco VNI Usage results also provide qualitative confirmation of many of the trends projected by the VNI Forecast model. While many of the application categories are not strictly comparable, there are additional results that we consider to be consistent between the two research platforms.

VNI Forecast Projections VNI Usage Evidence
By the end of 2010, online video traffic will exceed P2P traffic. The subset of video traffic comprised of flash, streaming video, and Internet TV makes up 26 percent of broadband traffic, compared to the 25 percent of traffic that P2P represents.
Live video via Internet will reach 4 percent of consumer Internet traffic by the end of 2010. Streaming video via P2P-the majority of which is live TV content-is 5 percent of all traffic.
Video calling will exceed 1 percent of consumer Internet traffic by the end of 2010. Voice and video communications traffic (VoIP, voice and video over instant messaging) has reached 2 percent of all traffic.
Passive networking (consists largely of background streaming and downloading) has the potential to rival active Internet use as a traffic driver. Ten of the top 50 sites were associated with software updates and downloads

These findings echo what our Chairman and CEO, who regularly refers to this data, has been saying all along: He believes that if history is a guide, the VNI Forecast numbers, however aggressive they may seem, will, in the end, prove to be conservative with respect to the actual traffic growth that lies ahead.

Please do take a look at the 2010 Cisco VNI Usage Study results and get a better understanding of this one-of-a-kind data. Stay tuned for the next revision of the Cisco VNI Forecast data, beginning with the Global Mobile Data Traffic readout, in February, as is our tradition.

And of course, as always, thanks for your readership and discussion with us on SP360.  Have a great weekend!

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