Net traffic to leap 10-fold in 2 years
Top exchange says peak flow trebled in last 12 months
By Madeleine Acey, FTMarketWatch
Last Update: 9:38 AM ET Nov. 15, 2001
LONDON (FTMW) - Despite the collapse in dotcom stocks, the bread and butter of the Internet industry appears to be booming.
For those involved in providing the Net's infrastructure, things are threatening to grow too fast.
Europe's largest Internet traffic exchange, LINX, has announced it's planning for a ten-fold increase in traffic in the next 24 months.
"Our peak traffic flows are now three times what they were at this time last year," said LINX chief executive John Souter. "We may be facing a recession - but the Internet seems not to have noticed. Internet traffic continues to grow at a phenomenal rate."
LINX (London Internet Exchange) is a not-for-profit organisation mutually owned by more than 120 Internet service providers and Web content delivery companies. Like a telephone exchange, it routes Internet messages to their destinations.
Souter said the roll-out of broadband Internet access, increased use of the Web by businesses and the emergence of new consumer services such as video on demand would all push bandwidth demand.
New kit needed
As well as ISPs and telecoms carriers, this could all spell good news for makers of infrastructure technology.
LINX sales and marketing manager Vanessa Evans said the group had decided to deploy emerging 10 gigabit Ethernet technology to boost its network capacity. Ethernet is a long-standing data transmission technology and products have been improved to handle 10 gigabits per second.
A gigabit is 1,000 million bits of data. LINX says this is roughly equivalent to 60,000 average-length emails. LINX reached an all-time peak of 12 Gigabits per second on Monday, Evans said, after news of the Queens, New York plane crash.
The exchange currently uses network switches from Extreme Networks (EXTR: news, chart, profile) and Foundry Networks (FDRY: news, chart, profile). It recently deployed a new optical fibre network and Evans said it was investigating adopting dense wavedivision multiplexing (DWDM) optical networking technology to get more out of its fibre infrastructure.
DWDM splits lightwaves into several channels which can each carry voice and datastreams - multiplying the amount of traffic that can be put down each fibre.
Large telecoms equipment makers such as Nortel (NT: news, chart, profile), Lucent (LU: news, chart, profile) and Alcatel (FR:013015: news, chart, profile) (FR:013000: news, chart, profile) (ALA: news, chart, profile) make DWDM products, sometimes in conjunction with smaller component makers like Bookham Technology (UK:BHM: news, chart, profile) (BKHM: news, chart, profile).
Nortel sees spending indicators
On Wednesday Nortel trumpeted what it said was the world's longest network. The Canadian network equipment maker said it had deployed the 1,500 kilometre, 200 gigabit per second North American network for Net infrastructure company Global Crossing (GX: news, chart, profile).
But Nortel was cautious about predicting an upturn in fortunes. A spokesman said there was no doubt that bandwidth was in demand, but Nortel remained focused on the long-term "We are beginning to see early indications that capital spending by service providers is approaching sustainable levels," he added.
Companies that usually install and manage these companies' equipment include Colt (UK:CTM: news, chart, profile) (COLT: news, chart, profile), Energis (UK:EGS: news, chart, profile) and Cable & Wireless (UK:CW: news, chart, profile) (CWP: news, chart, profile).
European-wide growth
LINX's Evans said the surge it was seeing was being repeated in other countries. "Most of the other exchanges in Europe are expanding to cope with growth. About six months ago, we saw steady linear growth, but that's completely changed now.
"We don't know how far through the bad times we are but traffic has continued to grow, ISPs continue to report getting more and more demand for business. When traffic grows you have to spend more money on equipment and new technology."
She added that other companies to benefit from this could be those that make robust Web servers.
"On September 11 a lot of Web sites went down. Getting hit with queries, the servers couldn't cope."
In the UK companies like Zeus in Cambridge say their server software beats load records when deployed by companies like Hewlett-Packard (HWP: news, chart, profile).
Others like Cacheflow (CFLO: news, chart, profile), Inktomi (INKT: news, chart, profile) and Akamai (AKAM: news, chart, profile) help cut down on delivery problems and network overload by mirroring and locally storing certain parts of Web sites so frequent users don't have to download everything from the content provider's main server each time they visit the site.
LINX has already announced it's spending £2 million over the next year to boost its infrastructure. So it seems that the view expressed over the last few months that telcos and other Internet infrastructure carriers would be forced to start spending money again is correct.
Madeleine Acey writes on technology for FTMarketWatch in London.
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