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Summary:

The need for speed (and scale) is driving the growth of private networks owned by companies like Facebook, Google, Amazon and Microsoft. While the public internet is still larger, the private one is growing.

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The world is still sucking down bandwidth like it’s an elixir of the gods, with global bandwidth demand reaching 138 Tbps in 2013, a 4.5 fold increase from the 30 Tbps of capacity from five years before. But it’s the mix of that growth that’s worth noting, according to a report out Wednesday from Telegeography.

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Traffic on private networks owned by Facebook, Amazon, Google and other web giants is driving the majority of that growth — about 55 percent of it averaged over that five-year period between 2009 and 2013. The remainder comes from public network traffic operated by carriers like AT&T, Comcast, Level 3 and others. Those public carriers still make up most of the traffic, however. From the report:

Internet backbones remain the primary users of international bandwidth, accounting for 75 percent of demand in 2013. However, the drivers of international bandwidth demand are changing. As private network operators, including large content providers like Google, Microsoft, and Facebook, expand their internal networks, their bandwidth requirements increasingly exceed those of the largest carriers.

Last year a quarter of international bandwidth was used on private networks, as companies try to figure out how to expand their reach and lower the costs they pay for networking. This has led to a shift in how the internet operates, from connecting users to users to the newer model of linking users to data centers, and data centers to each other, according to Alan Mauldin, a research director at Telegeography.

This trend is driving decisions such as Facebook’s leasing of fiber in Europe and in the U.S. as well as Google’s decision to invest in submarine cables. It’s also leading to economic shifts, as ISPs who play in the transit market like AT&T, Verizon and Comcast attempt to use their singular access to last-mile subscribers as a way to drive big companies to pay for network interconnections or transit.

We’ll discuss this topic in greater depth at our Structure conference in San Francisco June 18 and 19th when Craig Labovitz of Deepfield Networks shares some of his data on how the structure of the internet is changing.

  1. The Growth of bandwidth on Private networks certainly is good news for everyone as this enables the corporations such as facebook to connect more users than it currently can.

    The real beauty of all this will be seen in times, where there’s actually more users connected Online especially free or at very low costs, as this will enable companies like Google, facebook and others to reach their target market much more easily and gather more useful data on their users which in turn enables them to make more money in terms of revenue from advertisers.

    This however is being realised more and more which is why the very same companies are also investing on technologies that can allow them to offer free or very low cost internet access especially to developing countries.

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  2. It’ll be interesting to see if the biggest players attempt to bypass the access network carriers by utilizing wireless technologies such as WiMax to connect directly to customers. The disincentive in doing that though is that they would likely be subjected to FCC regulation, which they will want to avoid.

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  3. We need more data centres. Most traffic is local that isn’t peering.

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