5 Pivotal Trends Emerging from PTC 2017

How subsea cables, virtualization and other innovations are changing the face of networking

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I always look forward to attending Pacific Telecommunications Council (PTC) conferences because they’re excellent bellwethers of things to come, and not just in the networking industry, but all that networking touches. In this increasingly interconnected world, that includes just about everything.

This year’s theme, “Changing Realities,” reflected what we are experiencing at Equinix particularly well. Here are five pivotal industry trends from PTC 2017 that I think will resonate with our partners and customers:

  1. Converged solutions become the norm

There will not be a single “anchor” networking solutions provider, but rather a combination of multi-tiered solutions from multiple, interconnected partners. This pivot in the communications delivery model is because network, cloud and other service providers need to take a solutions-based approach to customer acquisition to succeed. Networks touch everything, so the entire market is looking at packaging the components and partners needed to create a more complete solution offering to customers.

What’s the result of these shifts? We expect accelerated growth in vertical industry and horizontal application ecosystems, where direct interconnection is possible in vendor-neutral environments. We also expect these growing business ecosystems to spur the expansion of online buyer and seller solutions marketplaces, where companies can leverage real-time analytics to find the perfect solution or partner to match their business requirements.

2. Subsea cable systems grow in depth and breadth

According to the 2016 SubTel Forum Industry Report, over $5.5 billion will be invested in more than 41 submarine cable projects between 2017-2018. At Equinix, we’ve publicly announced our involvement in 12 subsea systems and expect that number to grow.

The surge in subsea cable systems not only stems from increases in bandwidth demand driven by new sources of data (e.g., the Internet of Things, cloud), but also from those network and cloud service providers that want to own and control their own communication services. Carriers and top-tier service providers such as Amazon, Facebook, Google and Microsoft are all investing in their own subsea cable infrastructures, with funding assistance from consortium members that will also benefit from those communications services.

This aligns with a developing trend we’re seeing where subsea cable systems are being terminated at a carrier-neutral data center, instead of at a beach landing station. This direct access to the business ecosystems inside the data centers increases the overall system’s value to consortium members and their customers. We’re also seeing IT infrastructures increasingly move out to the edge of the corporate network, where these subsea cable systems reside.

3. Global reach goes far beyond geography

Strategies to achieve global reach, global touch and global enablement dominated many discussions at this year’s PTC conference. Global expansion doesn’t just mean opening a new office in a different geographic location or country, it requires adding access and interconnection points into multiple markets worldwide and effectively competing for customers on a global market basis.

We’ve talked about this trend in Interconnections articles on how global data flows are driving the growth of the world’s digital economy. Global expansion is also a key component of a multi-region, digital edge strategy to increase global points of presence using high performance, low-latency connectivity to people, locations, clouds and data.

4. Multi-tiered virtualized services mature

Year after year, software-defined networking (SDN) and network function virtualization (NFV) have been popular topics at PTC conferences. The industry recognizes the importance of virtualizing the communication protocol stack to free up networking capabilities from hardware dependencies and reap greater flexibility, agility and cost benefits. And with the maturity of SDN and NFV solutions comes the ability for companies to deploy virtualized, multi-tiered IT architectures that more easily and economically support a converged stack of network, cloud, compute, storage and application services. Remember what I said in trend #1 about “converged” solutions being the norm? This technology greatly accelerates that paradigm.

Because not all SDN and NFV solutions fit nicely into all types of applications and services, they have not had the broad adoption that was once anticipated. However, many enterprises and service providers are building up their strategies and portfolios, either as core functionality or by enabling access to SDN and NFV capabilities, to get to the point-and-click nirvana that multi-tiered virtualized services promises. By next year’s PTC, we expect to see a lot more use cases where companies are consuming multi-tiered, virtualized services based on SDN and NFV solutions.

5. Demand for virtualized unified communications explodes

One use case we see leveraging multi-tiered virtualization in a big way is unified communications (UC), particularly cloud-based Unified Communications-as-a-Service (UCaaS) solutions that include voice over IP (VoIP or Internet telephony), instant messaging, and collaboration and videoconference applications. According to Gartner, global spending on UC will reach $43.4 billion in 2020, with cloud telephony representing the most significant growth opportunity, followed by cloud-based web-conferencing services.

At Equinix, we’re helping to accelerate the growth of UCaaS by enabling direct and secure interconnection among service providers and their customers, bypassing the risks of the public internet.

Download the Gartner report “Colocation-Based Interconnection Will Serve as the ‘Glue’ for Advanced Digital Business Applications,” to learn how you can best leverage direct and secure interconnection to keep up with the changing realities of communications.

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