What should we fear, the exaflood or the data drought?

Posted on December 30, 2008  /  0 Comments

In all networks, there is a perpetual debate about the growth of whatever flows across it (data, voice telephony, traffic. electricity) and what levels of investment are most appropriate for carrying the future load without deterioration of quality.  This debate is going on now, about the Internet and the load likely to be placed on it by proliferating video, the so called exaflood.  But then, profits are essential for investment.   The quote below is about a data drought that could drive down profits and cause all kinds of bad things to happen.

Panic over, then? Not quite. Perversely, the real threat may come from a reduction in internet-traffic growth, says Dr Odlyzko. Too little internet traffic, he contends, could prove to be more dangerous to the industry than too much. A traffic-growth rate of 50%, combined with steady declines in equipment costs, means revenues are stagnant, “which is hardly a cheering prospect for the industry”. If traffic growth continues to fall—it is already below 10% in Hong Kong, where high-speed access is abundant—there will be slowing demand for faster connections from operators and new equipment from vendors. But if compelling new applications drive the growth rate back up to 100%, its level for many years, there will be more demand from customers for new services and equipment. Accordingly, says Dr Odlyzko, the industry should be looking for ways to stimulate traffic growth, rather than limit it.

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