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Cisco predicts fourfold traffic increase by 2014, claims to have solutions

John Mazur | June 8, 2010
Cisco projects video will represent 91 per cent of 2014s global consumer IP traffic, driven by HDTV, 3DTV, VoD, Internet video, and P2P growth.

This week, Cisco published its third annual Visual Networking Index forecast for global IP traffic. Cisco projects video will represent 91 per cent of 2014s global consumer IP traffic, driven by HDTV, 3DTV, VoD, Internet video, and P2P growth. While one can quibble with specifics of the forecast, it does provide useful vectors and insight into Ciscos market outlook and strategy. Ciscos big assumption is that service providers can and will profit from video traffic growth and continue to invest in their networks. However, its not clear who is willing to pay for this video-enabled Internet infrastructure.

Cisco VNI summary video will drive IP traffic growth

This years VNI by Ciscos service provider marketing group continues to project high IP traffic growth due primarily to video, with only slight variability from last years VNI forecast. Worldwide IP traffic for 20092014 will grow at a CAGR of 34 per cent, an increase of 4.3x from 2009 levels. Business traffics share of total traffic will decline from 21 per cent in 2009 to 13 per cent in 2014, reflecting the prosumer trend. VNI has proven to be a useful tool for Cisco to bolster its technology and business vision and roadmap.

The very antithesis of build it and they will come: they are coming, but who will build it?

Prior to releasing the Visual Networking Index, Cisco executives hosted their first-ever quarterly business update call with industry analysts to outline Ciscos strategy and vision for the service provider market. They described a two-sided business model based on B2B2C (business to business to consumer) where technology-enabled end users are willing to pay for personalized services that service providers are in a position to provide. But traditional network service providers (NSPs) need to ask where their revenues will come from in two years, and be willing to abandon traditional telco business models and embrace new ones to drive revenue growth. Ciscos evolving IP NGN vision posits that the network is the platform that integrates cloud services, the IP network, and client devices to deliver a unique user experience. Cisco implied that NSPs should partner with OTT players for mutual advantage to profitably meet end-user expectations for personalized services. Ciscos service provider technology strategy is to supply IP equipment that can not only operate north to south (i.e. core to access), but also east to west (i.e. data center to data center), supporting a content delivery network (CDN) that caches video content closer to end users and adds network intelligence. These cloud-based content delivery networks can be wholesale business offers that turn OTT players into valued partners, completing the B2B2C value chain. Thus, this is Ciscos answer to who will pay for IP video traffic growth: the OTT players.

 

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