Years ago, Cisco had asked the question, “Are You Ready?” Today, the citizens of the world certainly have said “Yes.” Broadband service providers (SP) have seen progressive shifts in user demand. And now, the question seems to be the user’s asking their SP’s. “Are You Ready? – to meet the needs of us users?”
If you haven’t seen the VNI statistics, the results will shock you. SP’s are on the verge of witnessing staggering amounts of network traffic streaming through their networks. You ask, how staggering? Well, it’s akin to streaming 130,000 titles in the Netflix DVD library simultaneously in just one second.
How do you prepare for that upswing in network traffic? Some forward-looking SP’s are already taking preemptive actions – not just to meet needs through upgrades, but because they see an exciting upside opportunity. Consider the example of how Telstra has rolled out a new Content Delivery Network (CDN) in Australia.
In this business, growth is a given. However, the whole notion of what constitutes “high-growth” takes on new meaning when there’s a significant change in user application characteristics. For the SP, the answer cannot be simply larger and faster interfaces. There are new dynamics of traffic patterns and traffic flow that speed alone cannot solve efficiently. So, why has content distribution suddenly become an essential component of SP business strategy? The way we all consume information is rapidly evolving – whether at work, at home, or on the move. The average user, in the course of their day typically:
- watches HD video content
- uses a smartphone to check email, watch video, connect with friends, and use life assisting applications.
- attends a video conference
- Spends time social networking or playing games with a friend(s) over the Internet
For an SP, this implies that there will be more video to stream, more devices to connect, and higher expectations from customers on quality of experience.
However, let’s look at the key challenges SP’s face from a network perspective:
- Reducing OpEx – You can’t make profits if your spend outpaces your revenue. A Service Provider’s operational expenses today are in the range of 50 to 80% of revenue. It’s the single major challenge for an SP as they decide to expand their network. A larger network not only adds cost but also brings in greater complexity.
- Battling Commoditization – Service provider offerings today are getting commoditized. Many services are mature and the customer perceives all SP’s offerings as being equal. Consequently, SP’s are competing with price discounts.
- Scaling Profitably – The marginal cost of CapEx investments is sometimes greater than the near-term marginal revenue. SP’s prefer to pay only for what they need now, or will need to ensure increased revenue for CapEx investments by way of multiple service offerings.
So, to help SP’s deal with these challenges, on March 9 Cisco introduced the notion of multidirectional networking as the answer to the quest for the Next Generation Internet network. We also introduced Cisco CRS-3, as a primary foundation to prepare for this transformation. In the coming weeks and months, we’ll be introducing innovations in other places in the network.
Think about how your own Internet usage characteristics are evolving. Then, ask this key question: As an SP, are you pre-positioned to proactively scale efficiently and affordably just-in-time to take advantage of these emerging new opportunities? “Are You Ready?”