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The state of broadband in the U.S. [infographic]

Rani Molla — Fri, 23 Nov 2012 17:00:13 +0000

For many people, their broadband connections are their lifelines. So what is the state of broadband in the U.S.? Well, when it comes to speed and price and adoption, we’re certainly not a leader — “middling” is a better way to describe our position.

Currently 119 million people that live in the U.S. don’t have broadband connections (for many reasons, including not wanting it or not being able to afford it) while 19 million don’t even have the option to get it. Our rate of broadband adoption (62 percent) lags behind countries such as South Korea, the U.K.,and Germany, according this year’s Federal Communication Commission report. (We’re closer to the penetration rates to Japan, Finland, and Canada.) These numbers are not likely to change soon, given that broadband growth is slowing and providers are moving away from wireline infrastructure.

Pricewise, we’re not in the top 10 in any speed tier, and in the in the highest tier — 15-25 Mbps — we’re 26th out of 32 countries. Hong Kong and Denmark both have cheaper internet — and faster average broadband speeds.

In this infographic, we highlight some key facts on broadband in the U.S. We obtained the data from the FCC, the National Broadband Map and Akamai.

ADOPTION

196.7 million (62%)

Americans who have broadband

15th

rank in wired broadband adoption per capita

Green denotes areas with at least two wireline broadband providers. Click to see how well your area is covered by both wireline and wireless broadband providers. Source: National Broadband Map.

SPEED

6.6 Mbps

average U.S. broadband speed

9th

U.S. broadband speed rank worldwide

The average internet speed worldwide is 3.0 mbps. While the U.S. beats the average, it doesn’t stand out among other developed nations. Source: Akamai

1Gbps

speed in Kansas City, using Google Fiber

Google Fiber has by far the fastest speeds in America. Click to test your speed. Source: Google/Ookla

COSTS

$249

amount telcoms invest in U.S. broadband, per person annually

$155

worldwide broadband investment, per person per year, by OECD countries

$528

what Americans on average pay for a standalone broadband subscription every year (5-15 mbps)

21st

rank out of 33 countries in price for that speed tier

This map shows which broadband technologies serve different parts of the U.S. Click to see what type of infrastructure your hometown has. Source: National Broadband Map

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Key technologies for the smart city

Wed, 28 Mar 2012 06:55:30 +0000

As more and more people move to urban areas there is an escalating need for the smart city, where technology, sustainability, citizen well-being and economic development integrate. Currently five key technology sectors are enabling the smart city: smart grids, smart transport, smart water and waste management, smart building systems, and the enabling ICT platforms for the smart city. This report examines each and provides recommendations to those key players — IT companies, telcos, utilities and real estate developers — that wish to benefit and harness those technologies.

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In cloud computing moves, money isn’t everything

Barb Darrow — Mon, 26 Mar 2012 19:05:13 +0000

While saving money is a common reason cited for moving IT to the cloud, it is really not the overriding driver at all for most companies, according to new research.

What’s more important than cost savings for companies — at least in the U.S. and Asia-Pacific regions — is the ability to standardize their software and business processes across the company, according to a new survey of 600 large companies by Tata Consultancy Services, the $8 billion IT service provider. In Europe and Latin America, the primary rationale was the ability to ramp systems up and down faster.

According to the survey:

The factors driving companies to launch entirely new applications in the cloud are quite different – to institute new business processes and launch new technology-dependent products and services.

The results confirm at least one bit of conventional wisdom — that European companies lag their U.S. counterparts in cloud adoption. Among U.S. respondents, 19 percent of their total applications run in the cloud compared to 12 percent in Europe. But both regions lag Asia and Latin America in adoption — at least in percentage of applications now running in the cloud: 28 percent for Asia and 39 percent for ~~Europe~~ Latin America.

However, companies in all regions expect their cloud usage to grow dramatically by 2014. For example, U.S. companies expect that 34 percent of their total applications will be cloud-based in two years. European repondents said they expect cloud applications to hit 25 percent in that period. But Asia and Latin America will keep up the pace, with Asia-Pacific companies expect to hit the 52 percent mark and Latin America 54 percent in 2014.

One of the reasons companies typically cite for moving to the cloud is that they’re able to move such IT budgets to an operational expense (OPEX) that can be spread out over the course of deployment as opposed to a larger, up-front capital expense. OPEX is far easier to get approved but, in terms of actual cost, there can be a point after which the cloud cost can exceed the capital expense. After five years paying a cloud provider for storing data — and also paying the networking charges for accessing that data — in some cases it may actually make sense to go with an on-premise solution. Companies need to do this math up front to determine which model works for them.

But, as Tata’s results show, cloud computing is big now, even if it’s not the panacea for bloated budgets. Actual adoption likely will ramp up significantly as companies get comfortable with the model and better understand how and when to use it, and what it might cost.

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The capex connection: Why we pay for privacy on the Web

Derrick Harris — Thu, 01 Mar 2012 07:55:03 +0000

There is a big connection between Facebook’s large and growing infrastructure budget and advertising, the latter of which is the primary culprit behind many privacy concerns. The gist is that ad-supported web platforms such as Facebook have to spend lots of money on infrastructure in order to maintain adequate performance levels and power new features. However, that means every dollar spent on infrastructure has to add up to even more money brought in by advertising. Simply put, the true costs of building new infrastructure take a huge bite from a company’s bottom line — in more ways than one.

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AT&T data center sale highlights advantages of leasing

Jo Maitland — Fri, 10 Feb 2012 22:00:59 +0000

Arden Realty sells expensive data center to Griffin Capital. The sole tenant, AT&T, gets to continue to enjoy the benefits of leasing the facility in favor of owning it, avoiding the risks of data center ownership such as high taxes, carbon reporting issues and data privacy regulations.

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Apple spending big next year on retail and cloud

Erica Ogg — Mon, 31 Oct 2011 14:57:47 +0000

Apple is doubling down on its retail and cloud operations. The company says it will spend about $8 billion in capital expenditures in 2012, which is almost twice as much as the $3.4 billion it spent during fiscal year 2011, which ended Sept. 30. Apple doesn’t willingly telegraph its plans, but thanks to its annual filing with the Securities and Exchange Commission, we get a peek into where the company plans to invest its money next year.

The increase was pointed out on Monday by Analyst Maynard Um of UBS in a research note.

A chunk of that new investment will, no surprise, go toward its retail operations. The company will spend $900 million on its stores in 2012, up from $614 million this past year.

Apple Stores have been growing rapidly, particularly outside the U.S., and especially in the greater China region. Apple opened 30 new stores in the most recent quarter alone, to bring the total to 357. CFO Peter Oppenheimer noted on Apple’s earnings call two weeks ago that the company would be opening 40 new stores in 2012, and “75 percent of those will be outside the U.S.” He also noted that Apple would be “replacing” some of the company’s higher-volume stores here in the U.S.

The rest of the $7.1 billion in extra capital expenditures is listed as “other.” From the 10-K:

The Company anticipates utilizing approximately $8.0 billion for capital expenditures during 2012, including approximately $900 million for retail store facilities and approximately $7.1 billion for product tooling and manufacturing process equipment, and corporate facilities and infrastructure, including information systems hardware, software and enhancements.

So some of the money is going to be spent on building the company’s new “spaceship” headquarters in Cupertino, Calif. and equipment for its manufacturers, but IT systems hardware, software and “enhancements” is almost certainly pointing to the company’s ongoing data center project and, by definition, its cloud infrastructure. (See also Horace Dediu’s examination of the data and how capex can be used to foreshadow iOS device volume production.)

Apple is building out a gigantic data center in North Carolina, and perhaps even a solar farm to power it — if reports are correct. That data center will support its cloud operations, and could increase the capacity and eventually lower costs for the maintenance of Apple’s iCloud service. Apple would never be accused of jumping on the cloud bandwagon early, but spending billions more underlines the fact that the company has much bigger plans for iCloud.

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The Solid-State Future

Mike Speiser — Sun, 31 May 2009 07:01:57 +0000

Every so often a new technology emerges that changes everything. In the world of storage, the last major media shift was the move to hard disk drives (HDDs) from tape. While tape is still around today as a target for backups and archiving (it’s cheap, durable, and portable for offsite storage), disk owns the vast majority of primary storage.

Today we find ourselves on the cusp of a transition in storage as massive as the move from tape to hard disk drives — the move from hard disks to solid-state disks.

CAPEX, OPEX and IOPS

From a capital expense (CAPEX) perspective (specifically the cost of acquiring a unit of storage), disk was more expensive than tape when HDDs started the last storage media disruption. Tape was also arguably cheaper from an operating expense (OPEX) perspective (specifically the maintenance cost including power, space, and labor). But from a cost-of-input/output-operations-per-second (IOPS) perspective, there was no contest. Anything that required fast access to storage moved to disk in short order and a new set of applications was enabled. Cost per IOPS won.

While it may appear that the transition from HDDs to SSDs (also popularly known as flash memory) will mean higher CAPEX on a cost-per-unit-of-storage basis, that may be misleading. Amdahl’s Law helps us to understand the maximum improvement to a system when only part of the system is improved. Mainframes leveraged Amdahl’s Law to maintain balance among the various components (compute, storage, and so on) in order to optimize overall system performance. Throughout the evolution of open systems this sense of balance has been lost. While Moore’s Law has been applicable to storage in terms of cost per unit of storage, storage IOPS have not kept pace with compute IOPS. The system is out of balance. Solid-state disks will help us regain the balance between storage and compute, so CAPEX per IOPS may well decrease substantially.

OPEX will also decrease as SSDs replace hard disks. Power consumption is lower with SSDs than with hard disks, so electricity costs per IOPS will also drop. Solid-state disks will bring better performance, reducing the number of systems and IT professionals required to do the same job. And since SSDs have no moving parts costs related to maintenance should decrease.

Just as with the last storage discontinuity, total cost per IOPS will be much lower for SSDs relative to hard disks in many, if not most, cases. Consequently I believe that, in the coming 5-10 years, SSDs will replace HDDs en masse. Cost per IOPS will win again.

And just as the last transition enabled a new set of applications, so too will this one. Already consumer devices like laptops, iPods, and the iPhone have put SSDs to good use. This is just the tip of the iceberg. Here are a few opportunities that come to mind:

1. Enterprise storage.

The next EMC and NetApp will likely be built off the back of the move to SSDs. Incumbents will have difficulty changing their mental models to address the new world. Existing vendors are already introducing hybrid solutions into the market, which is exactly what you would expect of incumbent players. But their software and systems were designed with assumptions about spinning media that are not appropriate in a solid-state world. There is room for at least one massive, pure-play SSD enterprise storage vendor.

2. Enterprise applications.

The vast majority of today’s application software was also written with hard drives in mind. Just as with storage, there will be an opportunity for applications to be written from the ground up with solid-state disks as the sole target. Will a new type of database emerge? If you designed the perfect database today with solid state in mind, would it look like Oracle or MySQL? Will SSDs empower real-time analytics, supply chain management and financial reporting? How will an order of magnitude improvement in IOPS change the art of the possible in customer-facing applications?

3. Consumer applications.

The largest consumer Internet players spend vast sums of capital on in-memory solutions and on operating costs associated with massive farms of servers and hard disk drives. Delivering results to a search query, placing the right advertisement in front of the right consumer at the right time, running a massively multiplayer online game, and building personalized pages are IOPS-intensive applications operating on gargantuan data stores. SSDs will dramatically lower the cost of providing services like these, ushering in a wave of innovation. And hopefully this will empower a bunch of hackers with little capital to disrupt some very large businesses as well as to invent all new ones.

While the world is suffering from a nasty recession, innovation marches on. Solid-state drives will help us regain balance between compute and storage, which will lead to lower overall costs and usher in a new class of applications. I can’t wait.

*I would like to thank John Colgrove for reading a draft of this note and providing his feedback. John is an EIR at Sutter Hill Ventures, previously served as a Symantec Fellow and VP of Technology Strategy for the company’s Data Center Management group, and was a founding engineer of storage software leader VERITAS Software which was acquired by Symantec.

Mike Speiser is a Managing Director at Sutter Hill Ventures. His thoughts on technology, economics and entrepreneurship will appear at this time every week.

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Google CapEx Falls, Temporarily

Om Malik — Sat, 18 Oct 2008 00:11:04 +0000

Like Jefferies & Co. analyst Youssef Squali and Data Center Knowledge’s Rich Miller, I was surprised by the big dip in Google’s capital expenditures that the company revealed when it reported third-quarter earnings yesterday. At $452 million, this was the lowest spending on equipment for its data centers, networks and other infrastructure since the first quarter of 2006, when Google spent $345 million.

What was more shocking was that the capex as percentage of revenues just tanked, falling to 7.6 percent from 13.1 percent in the third quarter of 2007. Wall Street must have rejoiced at how stingy Google was being, but the fact remains that infrastructure is a strategic advantage for Google, and spending must continue.

Google’s management team said as much in a conference call with analysts. “We are going to continue to invest in capex, so we have no plans of slowing down,” said Chief Financial Officer Patrick Pichette, who went on to attribute the dip to data center buildouts being lumpy. “We are obviously getting better at it, so with efficiencies every extra unit of capacity is cheaper for us, so we are going to benefit back.”

According to Data Center Knowledge’s Miller, Google is done building out the first phase of its data centers in Lenoir, N.C., and Goose Creek, S.C.

	2005	2006	2007	2008
Capital Expenditure ($ Billions)	0.8	1.9	2.4	1.99*
Gross Revenue ($ Billions)	6.1	10.6	16.6	16.1*
CapEx as percentage of Gross Revenue	14%	18%	14%	12.4%*

* Data for the first three quarters of 2008.

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