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Across the world, exploding Internet demand poses challenges for subsea telecom and data center communities alike.

Powered by the smartphone and new media era, global Internet demand continues to boom. Across the world, service providers are racing to meet the bandwidth and interconnectivity requirements of users.

“When you look at traffic trends there are two main places they are undeniably exploding,” says Alex Vaxmonsky, Director of Ecosystem Development at Equinix,”namely, the wide area long haul space– essentially submarine cables—and the data center interconnect or so-called inter-data center business.”

But getting this bandwidth and connectivity explosion right—in terms of cost, availability, quality, and particularly geography—is pressuring the industry to think of service delivery in new ways, with new business models and new players.

Going direct

Among the ideas under scrutiny are the possibilities of direct connection between the cables and data centers. “There is an increasing focus on [doing this],”says Anthony Rossabi, Managing Director, Colocation and Connectivity for Digital Realty, a major data center operator, “and it is an interesting trend.”

It’s a seemingly innocuous idea that may chip away at several established practices including the use of coastal cabling landing stations to terminate cable systems. But to those inside the industry, it is a trend with significant implications for future network construction. Jon Hjembo, Senior Analyst at TeleGeography, a specialist market research firm, suggests “A vast majority of the partnerships between colo providers and subsea systems has to be facilitated by terrestrial backhaul, but we may be at the very cusp of seeing newer systems landing directly in colo facilities.” He adds: “Colocation providers and carriers are partnering to bring peering geographically closer to sources of demand [capturing traffic that would otherwise have to be backhauled].”

In some senses, this is a logical proposition, says Sean Bergin, Co-founder and President of APTelecom, a telecom and fiber consulting company specializing in emerging markets: “Formerly many facilities where the cables terminated were [effectively] not open access and there was a limitation in the choice of which backhaul providers to use. Now, if you are landing in an open access data center then all the options are open to you.” Bergin argues that this improves the marketability of subsea cable projects as well and the ability for operators to be free of incumbent telco influences, but adds: “That pretty much applies to consortia built systems – private systems will go POP to POP anyway.”

Economics is the key point since eliminating a landing station may be an attractive saving on build cost but geography also matters. Bergin reflects: “From our perspective, a cable system is only realistically as good as where it starts and finishes in terms of its popularity and its ability to generate revenue.”  He says that where subsea cables are terminating far away from POP locations they may look less attractive to buyers of capacity. Eliminating most of a substantial terrestrial backhaul link will also lessen the risk of outages—a distinct risk, say experts—in any additional terrestrial networks as well as saving station build cost. Equinix’s Vaxmonsky argues that the resulting value proposition is suggesting cable investment returns may be accelerated, along with a saving in backhaul costs and the prospective performance increase, where he suggests that intra-data center connection possibilities “greatly empowers the consumers when you are tapping into the various ecosystems in the data center.”

Vaxmonsky says the company has been winning about one project in this space a month since last year but acknowledges that each project is “very different in nature”. He suggests that, with improvements in technology, it is possible that 5—10 projects could use the all-in-one strategy directly, and 75% of the company’s metro networks could see development involving configurations on the same principle, but “bifurcated” into power feeds and data center interconnect.

Moreover, as world information flows and traffic demand becomes ever greater, and in some sense nuanced by application, future connectivity design may also be heavily influenced. TeleGeography’s Hjembo points out that for content driven operations, providers have “a strong interest in getting the most direct, low-latency access possible to eyeballs” in primary markets. This could certainly be an impetus for a closer partnership between transport networks and major colo providers.”

Getting married

Some executives ponder what the relationship between cable systems and data centers should ideally become. Will partnership imply convergence between two very different sectors? Will data center providers build their own cables? Most executives suggest this is unlikely to happen. “I don’t see these [data center] players building submarine telecom capacity,” says John Hibbard of Hibbard Consulting. “I think the extent to which they have converged is almost limited to the fact that some data centers have found it useful to have some cable landing stations in them…it’s arguably a good opportunity to contain costs…by using something that is there.”

AP Telecom’s Bergin suggests: “I don’t see it as convergence. I see it as a marriage of convenience [between the two sectors].” TeleGeography’s Hjembo agrees. “I’d tend to agree that the subsea/colo connection is more of a marriage of convenience than necessarily a trend toward full convergence,” he suggests. “The colocation and subsea network sectors have always had a critical relationship, particularly in facilitating international network interconnection at major carrier hotels.”

But Digital Realty’s Rossabi argues a different perspective. “I wouldn’t say [it is] a marriage of convenience…I think it is more of a collaborative effort to ensure we serve the end customer. We all provide a piece of the puzzle, providing we can fit together with each entity playing a role.” He continues: “This involves bringing in as much fiber as possible to data centers.” Carrier neutrality inside the data center remains an important consideration, he argues, alongside the provision of route diversity.

Global industry, global attention

So where does this leave a possible alignment between sectors? There are certainly new elements to the mix. Vaxmonsky of Equinix says “there is a lot of opportunity out there…there are lot of people I am having conversations with who would never had a conversation in this space before.” Digital Realty’s Rossabi also suggests that data center players are now much more multipartite and should ideally become “the conduit that brings everyone together”, supporting “network providers, mobile network providers, digital media companies, content providers, subsea connectivity, and cloud providers…to create communities of interest, or ecosystems in data center facilities.” In this collaborative structure, each agent has a role and a value proposition but no one company that will be able to comprehensively satisfy end users, he argues.

However, the subsea piece of the jigsaw may see different concerns, cautions Bill Barney, CEO of Global Cloud Xchange, a service provider owning a global network of subsea cables, landing stations, terrestrial networks and network platforms. Changes mooted in the industry might prove controversial to those outside it especially in territorial and security terms. “Governments are now realizing the importance of landing stations [in terms of critical national infrastructure]. I don’t think governments are going to let the landing station [issue] go easily.”

On a domestic level, governments must also pay attention to other commercial interests many of which have significant lobbying power and which will also have impact on the design landscape for the industry and may encourage landing stations to persist. “Landing stations are the crossroads where Internet actually meets other industries such as fishing and shipping and it is all wrapped up in the landing station and how the cables come across the last 20 miles of shoreline,” he reflects.

In evolving to very high capacity systems, the Internet landscape is moving to its own powerful global infrastructure, but one that remains yet to be defined—and debated on.