Recently, I reported in a post on this blog that it would be wise to monitor the Television and the Broadcast industry as there are truly exciting developments underway … and that TV is still generating big bucks.
As smart-phones and tablets demand more bandwidth, the broadcast companies are offering to sell or rent their excess spectrum as they realize they are sitting on an increasingly valuable additional asset.
The original Internet is becoming obsolete and is being replaced by a new information superhighway. Traffic on the next generation Internet will travel on pulses of light moving through fiber-optic cables and satellites.
The Internet and its user base of billions worldwide are in the middle of a crisis … it is a bandwidth crunch that impacts us all.
Every single year for the past 5 years, Internet traffic has doubled with no signs of slowing down.
Since the Internet boom of the 1990s, Internet infrastructure has not had a major upgrade in carrying capacity. For the first time, in more than a decade, we are on the edge of an immense spending cycle aimed at upgrading those ‘old pipes.’
The critical shift that is necessary in order to keep those ‘pipes’ from clogging is the transition from decade-old 10G (10-gigabit) bandwidth capacities to the faster, higher-capacity 100G network that is also known as 100G Ethernet.
This network bandwidth will become a global standard and it will be running underground from city to city and undersea from continent to continent.
As with all creative destruction, there will be victims and beneficiaries of this trend. And for those searching for longer term investments, this new spending cycle will be a multi-year benefit for the fiber-optic networking companies since fiber-optic technology will be the communications medium of choice.
Below is an overview of why fiber-optic networking and equipment suppliers will be one of the best tech trades of the decade in order to develop Internet infrastructure updates.
The first big driver of big data traffic is video distribution.
Goggle’s YouTube, Hulu and Netflix have helped video become the biggest single consumer of bandwidth capacity in the network. For one thing, these platforms keep adding higher quantities of video to their services. But video has improved in quality as well. For example, HD (high-definition) video doubles bandwidth and emerging 3D video formats can redouble it.
The second driver that is causing this bandwidth crunch is voice.
Leaving aside the fact that widely used programs like Skype, Facetime, and Google Chat combine high-bandwidth video with their phone calls, communications are becoming more and more international. Such long distances demand more reliability. Moving alongside voice is music, which is digitized and broadcasted through popular apps like Pandora, Spotify, and more.
The third and last of the big three bandwidth drivers is data.
Cloud computing, or the migration of software and computing services from independent networks to online providers, is the big kahuna when it comes to data. When we store our data in cloud-based data centers, it is channeled over vast geographical areas in order to maintain resilience and closeness to end-users. That means that when we plug into the Internet, the cloud must be able to accommodate incoming traffic from anywhere and everywhere.
There are of course less obvious contributors to the bandwidth crisis.
Machine-to-machine communications contribute automatically. Smart grids such as connected utility-metering systems use a lot of bandwidth too. Remote monitoring services, which are tied to hospitals, schools, and security systems, rely on bandwidth. And then there are the ever-populating point-of-sale retail terminals of the variety you use in the “self-checkout” line at the grocery store.
The point is big data cannot be stopped. And somebody is going to need to build Internet infrastructure that can handle all the growth. At this rate, bandwidth infrastructure will become as important as road, water, and electricity systems within the next decade.
I trust this post has provided some background and evidence about why it is so important to be ahead of the game with the most disruptive tech and most disruptive business model going forward.
It is wise to monitor the mobile, social, and the Internet sectors of the tech industry as there are truly exciting developments underway because the (Original) Internet is dead … however, long live the New Internet! I will continue to monitor developments and provide updates in future articles and at my blog.
Also, I want to thank Josh Grasmick and Ray Blanco of Technology Profits Confidential, published by Agora Financial, as they were the source of some of the materials about the Internet mentioned in this post.
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