Five Key Factors Drive the Internet Growth Trajectory

Cisco issued results of their annual Visual Networking Index (VNI) Forecast (2011-2016). It's the company's ongoing initiative to forecast and analyze Internet Protocol (IP) networking growth and trends worldwide. The VNI Forecast update projects the significant amount of IP traffic expected to travel public and private networks -- including Internet, managed IP, and mobile data traffic generated by all users.

This year, Cisco has also developed a new complementary study -- the Cisco VNI Service Adoption Forecast, which includes global and regional residential, consumer mobile, and business services growth rates.

By 2016, annual global IP traffic is forecast to be 1.3 zettabytes -- (a zettabyte is equal to a sextillion bytes, or a trillion gigabytes). The projected increase of global IP traffic between 2015 and 2016 alone is more than 330 exabytes, which is almost equal to the total amount of global IP traffic generated in 2011 (369 exabytes).

This significant level of traffic growth is driven by five key factors:

1. An increasing number of devices: The proliferation of tablets, mobile phones, and other smart devices as well as machine-to-machine (M2M) connections are driving up the demand for connectivity. By 2016, the forecast projects there will be nearly 18.9 billion network connections -- almost 2.5 connections for each person on earth -- compared with 10.3 billion in 2011.
2. More Internet users: By 2016, there are expected to be 3.4 billion Internet users -- about 45 percent of the world's projected population according to United Nations estimates.
3. Faster broadband speeds: The average fixed broadband speed is expected to increase nearly fourfold, from 9 megabits per second (Mbps) in 2011 to 34 Mbps in 2016.
4. More video: By 2016, 1.2 million video minutes -- the equivalent of 833 days (or over two years) -- would travel the Internet every second.
5. Wi-Fi growth: By 2016, over half of the world's Internet traffic is expected to come from Wi-Fi connections.

The Cisco VNI Forecast Methodology

The annual Cisco VNI Forecast was developed to estimate global Internet Protocol traffic growth and trends. Widely used by service providers, regulators, and industry influencers alike, the Cisco VNI Forecast is based on in-depth analysis and modeling of traffic, usage and device data from independent analyst forecasts.

Cisco validates its forecast, inputs and methodology with actual traffic data provided voluntarily by global service providers and more than one million consumers worldwide. The following Cisco VNI Forecast resources and tools are available online:

• The updated Cisco VNI Forecast Highlights Tool provides key forecast predictions in short sound bites that can be chosen on a global, regional or country level (these include device, traffic and network speed projections).
• The Cisco VNI Forecast and Methodology, 2011 – 2016 White Paper provides the full detailed findings of the study.
• The Cisco VNI Forecast widget provides customized views of the growth of various network traffic types around the globe (revised for this 2011 - 2016 forecast period).
• The Cisco VNI Service Adoption Forecast White Paper provides a unique view into global and regional trends of next-generation residential, consumer mobile, and business end-user services and applications, underlying addressable markets and relevant devices and connections.
• The Cisco VNI Service Adoption Forecast Highlights Tool provides primary global and regional takeaways on user and subscriber, device and connection, and service adoption penetration rates.
• The New Cisco Data Meter application (beta version 1.0) for Android smartphones provides users with the following valuable network-related data: estimated and projected bandwidth consumption, individual app usage, Wi-Fi and cell connection speeds, and the location of nearby Wi-Fi networks.

Historically, Cisco VNI projections have generally been viewed as conservative; however, the forecast has proven to be quite accurate throughout its six-year history.

• In the initial 2007 VNI Forecast, Cisco projected an overall IP traffic volume of 28.4 exabytes per month by 2011. The actual volume in 2011 was 30.7 exabytes per month. The actual volume was about 7 percent higher than what Cisco projected five years ago.
• In the 2008 VNI Forecast, Cisco predicted that in 2010 Internet video would surpass P2P in traffic volume. In 2010, Internet video surpassed P2P in traffic volume -- confirming the Cisco VNI Forecast.

Exploring the Trends in Global Business Communications

Today, most important executive relationships are globally distributed, but many business leaders still say that they want more collaboration in person. Particularly during activities such as brainstorming for new ideas, managing a specific crisis or making presentations. This is among the key findings from a new Economist Intelligence Unit (EIU) survey.

While the primary function of meetings is to build relationships with customers, some 89 percent of EIU survey respondents say communications where the parties can see and respond to each other benefit internal business functions such as employee coaching and training as well as communications with partners and customers.

An additional 43 percent of respondents use meetings to discuss and resolve major issues with customers such as a service or product failure or dissatisfaction with the partnership. Motivations for expanding these meetings also include contract renewals, brainstorming sessions and being introduced to other clients or customers within the organization.

This EIU survey, sponsored by Cisco, explores the challenges of global enterprise collaboration and the perceived value of different types of business communications -- including telephone, instant messaging, email and conferencing.

Survey respondents were also asked their views on what business processes can be most impacted through in-person interaction as well as on potential productivity gains through these efforts.

The 862 global senior executives surveyed identified a number of key trends in business communications. These insightful findings include:

Face time is a priority -- When it comes to different stakeholders, business leaders attach greater importance to in-person meetings with customers than with colleagues, partners or suppliers. More than half (54%) of respondents to an Economist Intelligence Unit survey said they see meetings with customers as having the greatest impact on their business. This need for face time relates to how most respondents (56%) ranked the most important aspect of business collaboration: determining audience engagement and focus.

Email is getting in the way -- Business leaders in all categories cite email as the primary tool used in collaborating with colleagues, partners and customers (as much as 66% for senior managers) with the telephone identified as the second most-used business communication tool (25%). However, neither text nor voice alone was cited as the best option in communicating critical information in a global business.

Motivations for more meetings differ regionally -- Asked to pick their strongest motivation for meetings with colleagues outside of their own office, respondents from Asia-Pacific and Europe, the Middle East and Africa (EMEA) are most interested in resolving a problem quickly. However, U.S. business leaders are motivated more by cost reductions in meetings with colleagues. Non-U.S. respondents are also more interested in generating better long-term relationships during their meetings with partners and customers.

Industry dictates motivations as well -- In meeting with business partners or suppliers, respondents in the consumer goods industry are most likely to meet face to face to give or receive direction, while business leaders in energy/transportation, technology and services are most likely to meet to generate better long-term relationships. Respondents in other industries are most likely to meet with partners to be motivated or inspired.

To supplement the survey, the EIU hosted a roundtable discussion with two industry leaders, Joan Parsons, head of U.S. banking for Silicon Valley Bank, and Morten Hansen, a management professor at the University of California Berkeley School of Information and co-author of the book, Great by Choice, about their perspectives on business communications.

An analysis of the findings will be included as part of a EIU video webcast on April 24th, sponsored by Cisco Systems, Inc.

Five Predictions for Managed Cloud Services in 2012

The proof-positive business impact from managed cloud services deployment, including the numerous associated productivity benefits and anticipated cost-savings, have pushed cloud computing well into the mainstream during 2011.

As we move into 2012, International Data Corporation (IDC) predicts that this evolution will continue as more users test the growing capabilities of the public cloud services that are already available.

However, by 2015, IDC envisions a very different scenario -- one where cloud services will become commonplace, thereby forcing significant changes in the ongoing adoption of progressive business technology practices throughout legacy IT organizations.

"In the next 24 months, the 'cloud' as a marketing label will cease to exist, as the success of cloud services will mean that it will permeate the sourcing strategies of the CIO and business unit manager alike," says Chris Morris, Lead Analyst for Cloud Services at IDC Asia/Pacific.

He adds, "The use of externally sourced business and IT services from the cloud will form the basis of what we see as the Outsourcing 3.0 period, and will provide an extensive portfolio of services from which innovative solutions can be constructed."

How Cloud Drives the Next Wave of Outsourcing

With Outsourcing 3.0, the cloud will metamorphose into a universal service catalog of individual cloud services. This will begin to replace both traditional information technology outsourcing (ITO) and business process outsourcing (BPO) engagements as well as on-premises infrastructure.

IDC believes that in an Outsourcing 3.0 scenario, the sourcing of business and IT services from multiple external suppliers will result in a major challenge for the enterprise CIO. They will become a service broker and aggregator, involved in sourcing, integrating and managing the services -- on behalf of their business units.

Drawing from the latest research and internal brainstorming sessions amongst IDC's regional and country analysts, the following are five cloud predictions for 2012.

These key points represent major trends with either the most significant financial impact or long-term market impact across the Asia-Pacific region, according to the IDC assessment.

1. Less than Half of End-Users across APEJ will complete their Private Cloud Projects by 2014
2. Making 2 + 2 = 1: Cloud Service Orchestration Services Lead the Drive to Outsourcing 3.0
3. Infrastructure as a Service (IaaS) will become Verticalized by 2013
4. By the end of 2012, 90% of Telecom Service Providers (SPs) in the APEJ region will have brought a broad portfolio of Cloud Services to market; but, by end of 2013, their Portfolios will become Specialized as they redefine their preferred role in the Cloud Ecosystem and target specific markets
5. Cloud SP (CSPs) strategies based on Aggregation and Resale of IT and business services will Fail to meet Profitability Goals by 2013 unless they can efficiently and effectively Manage, Support and Bill Services from Multiple Service Providers