The Shard

Cloud Traffic Climbing To New Heights

The ShardAccording to that seer of seers, that prognosticator of prognosticators — AKA the third annual Cisco Global Cloud Index (2012 – 2017) — global cloud traffic, the fastest growing component of data center traffic, is expected to grow 450% by 2017. That’s a 35% combined annual growth rate (CAGR), while global data center traffic will grow a mere 300%. However, while the cloud and network traffic surges, IT spending will only increase 4.6% this year, inch up slightly in 2014, and contract to less than 4% growth through 2017.

By then, public cloud services spending will reach almost $110 billion, a CAGR of 23.5%. The primary driver for cloud adoption will shift from economics to innovation, said IDC, and the emergence of cloud as the core for new ‘business as a service’ offerings will accelerate cloud adoption and dramatically raise the cloud model’s strategic value beyond CIOs to CXOs of all types.

Another new study, from 451 Research, indicates a more modest adoption of a cloud of only $20 billion by 2016 but fueled by a 37% CAGR through that period. Platform as a Service (PaaS) will experience the fastest growth – a projected CAGR of 41% between 2012 and 2016.

End users accessing clouds for web surfing, video streaming, collaboration, and connected devices, i.e. the Internet of Everything (IoE), will account for approximately 17% of data center traffic. The majority of the traffic (76%), will stay within the data center and will be largely generated by storage, production and development data in a virtualized environment. While the remaining 7% will be generated between data centers, primarily driven by data replication and software/system updates.

“People all over the world continue to demand the ability to access personal, business and entertainment content anywhere on any device, and each transaction in a virtualized, cloud environment can cause cascading effects on the network,” said Doug Merritt, Senior Vice President, Product, and Solutions Marketing, Cisco. “Because of this continuing trend, we are seeing huge increases in the amount of cloud traffic within, between and beyond data centers over the next four years.”

IoE growth is expected to skyrocket, according to Gartner. Calling this the beginning of a new era, the Digital Industrial Economy, the analysis company predicts that the number of connected devices will grow from 2.5 billion in 2009, mainly cell phones and notebooks, to up to 30 billion devices connected with unique IP addresses, most of which will be products.

We’re talking some serious money here, said IDC. Just the Internet of Things — excluding a couple of billion wired people — will generate revenues of $8.9 trillion by 2020 on components, processes, and supporting IT and connectivity, up from $4.8 trillion in 2012.

Image credit: ale (flickr)

About the author
Steve Wexler
Steve is a proficient IT journalist, editor, publisher, and marketing communications professional. For the past two-plus decades, he has worked for the world’s leading high-technology publishers. Currently a contributor to Network Computing, Steve has served as editor and reporter for the Canadian affiliates of IDG and CMP, as well as Ziff Davis and UBM in the U.S. His strong knowledge of computers and networking technology complement his understanding of what’s important to the builders, sellers and buyers of IT products and services.