If you are a service provider, the title of this blog probably has you shaking your head. SPs know only too well that Internet video is costing them money because of the expense of maintaining an infrastructure capable of delivering high-quality online video. The good news is that there is a way to monetize that demanding video traffic.
In 10 to 15 years, Cisco Internet Business Solutions Group (IBSG) estimates that consumers will be watching Internet video as much as 50 percent of their video-watching time. Rather than panicking at the thought of supporting that magnitude of video traffic, SPs should be thinking about how to turn it into profits.
SPs have a strategic advantage over current content delivery network (CDN) providers; traditional CDN services allow content providers to bypass Internet congestion points, but do not allow them to bypass potential congestion points within the SP network that provides Internet access to consumers. CDN services delivered via the SP’s network are delivered by CDN caches placed much closer to the final viewer, reducing the probability of having congestion issues over the delivery path.
If there’s one thing that service providers are familiar with, it’s change. There’s been nothing but change -- wave after wave of disruptive change -- from the industry deregulation of the 1980s, the convergence of voice, data, and video of the past couple of decades, to the current era of digital media, which devours SP capacity without contributing equivalent revenue. But if you see change as opportunity, the projections of overwhelming future video growth is the potential “mother lode.”
The challenge is finding ways to monetize video traffic. This can be done by breaking out of traditional mindsets and adopting a two-sided business model -- serving consumers as well as customers and business partners.
Cloud computing has raised a lot of questions with service providers (SPs) and enterprises alike. Because the Cisco Internet Business Solutions Group (IBSG) is in the business of answering questions, we talked to IT decision makers across several verticals in the United States, the European Union, and India to see what companies are thinking.
We found that cloud is happening faster than most people imagine. Almost everyone we interviewed is in the process of evaluating cloud computing. We estimate that by 2013, public cloud computing services revenue will reach nearly US$44 billion, and more than 12 percent of enterprise workloads will be running in the public cloud. A trend toward convergence of the IT and networking departments will ease this transition.
Companies are not jumping wholesale into a cloudy future -- decisions are being made on an application-by-application basis. The factors driving enterprises to the cloud include variable workloads (tax season for financial firms comes to mind), and the ability to quickly set up and get running. Also, some apps just run better in the cloud, such as data entry or process interfaces to partners or suppliers.
Inhibiting cloud are the usual suspects: security, legacy architectures, and sunk costs.