Global Cloud Index: Traffic to Grow Sixfold by 2016

In the second annual Cisco Global Cloud Index (2011-2016), Cisco forecasts global data center traffic to grow fourfold and reach a total of 6.6 zettabytes annually by 2016. The company also predicts global cloud traffic, the fastest-growing component of data center traffic, to grow sixfold – a 44 percent combined annual growth rate (CAGR) – from 683 exabytes of annual traffic in 2011 to 4.3 zettabytes by 2016.

For context, 6.6 zettabytes is equivalent to:

• 92 trillion hours of streaming music – Equivalent to about 1.5 years of continuous music streaming for the world's population in 2016.
• 16 trillion hours of business Web conferencing – Equivalent to about 12 hours of daily Web conferencing for the world's workforce in 2016.
• 7 trillion hours of online high-definition (HD) video streaming – Equivalent to about 2.5 hours of daily streamed HD video for the world's population in 2016.

The vast majority of the data center traffic is not caused by end users but by data centers and cloud-computing workloads used in activities that are virtually invisible to individuals.

For the period 2011-2016, Cisco forecasts that roughly 76 percent of data center traffic will stay within the data center and will be largely generated by storage, production and development data. An additional 7 percent of data center traffic will be generated between data centers, primarily driven by data replication and software/system updates.

The remaining 17 percent of data center traffic will be fueled by end users accessing clouds for Web surfing, emailing and video streaming.

From a regional perspective, the Cisco Global Cloud Index predicts that through 2016, the Middle East and Africa will have the highest cloud traffic growth rate, while the Asia Pacific region will process the most cloud workloads, followed by North America.

Overview of the Latest Worldwide Market Study:

• The Cisco Global Cloud Index (2011-2016) was developed to estimate global data center and cloud-based Internet Protocol (IP) traffic growth and trends. The Cisco Global Cloud Index serves as a complementary resource to existing network traffic studies, providing new insights and visibility into emerging trends affecting data centers and cloud architectures. The forecast becomes increasingly important as networks and data centers become more intrinsically linked in offering cloud services.
• The Cisco Global Cloud Index includes a "workload transition" forecast, which shows the workload shifting from traditional data centers to more virtualized cloud servers.
• The forecast also includes a supplement on Cloud Readiness Regional Details, which examines the fixed and mobile network abilities of each global region (from nearly 150 countries) to support business and consumer cloud-computing applications and services.
• The Cisco Global Cloud Index is generated by modeling and analysis of various primary and secondary sources, including 40 terabytes of traffic data sampled from a variety of global data centers over the past year; results from more than 90 million network tests over the past two years; and third-party market research reports. 

"As cloud traffic continues to proliferate in a new world of many clouds, the Cisco Global Cloud Index provides all cloud computing stakeholders with a very valuable barometer to make strategic, long-term planning decisions. This year's forecast confirms that strong growth in data center usage and cloud traffic are global trends, driven by our growing desire to access personal and business content anywhere, on any device. When you couple this growth with projected increases in connected devices and objects, the next-generation Internet will be an essential component to enabling much greater data center virtualization and a new world of interconnected clouds," said Doug Merritt, senior vice president, Corporate Marketing, Cisco Systems.

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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.

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Redefining Mobility in the Workplace with Cisco Cius

Cisco has introduced the AppHQ -- an application ecosystem built specifically for Cisco Cius that provides new ways to create, manage and rapidly deploy tablet applications in the enterprise.

Cisco Cius, an Android-based tablet created for the enterprise, combines voice, video, collaboration, and virtualization capabilities unlike any other tablet on the market today. With Cisco Cius, organizations can now deliver an optimized tablet with enterprise-grade security, as a natural extension of the enterprise network.

The device provides customers with mobility, centralized manageability, virtual content creation and computing capabilities, and a comprehensive suite of collaboration applications.

AppHQ provides developers with tools and resources to create, test and market applications for Cisco Cius, and allows IT managers to control which applications can be used on the devices. Additionally, companies can create private, custom-branded application storefronts for their organizations where employees can find, publish and procure applications that complement their business environments.

Introducing Cisco AppHQ: A Trusted Source for Business Applications

Cisco AppHQ is a highly secure, cloud-based user storefront that provides capabilities for end users and IT managers not found in other application stores today. Some of these capabilities include:

• Testing and validation: IT managers want to know that applications deployed in their environment are appropriate for the enterprise. Cisco AppHQ provides IT managers and users with a trusted source for applications, ensuring that every application within AppHQ goes through Cisco validation testing, whether developed by Cisco, third-party Android developer partners, or users within the enterprise. The validation process includes interoperability testing both for the application itself and in typical configurations within the device.
• Store-within-a-Store: Enterprises will have a Cisco hosted, highly-secure and private application store within AppHQ. Businesses can customize the storefront, following their corporate branding guidelines, including use of logos, icons and color schemes. Beyond customization, the store-within-a-store is a platform that customers can use to deploy applications efficiently in their organizations.  For example, a financial services company could deploy applications pertaining to their back office operations, such as human resources or payroll apps, and populate those applications on the devices of relevant employees. 
• Empowers IT management: With AppHQ Manager, IT will have the ability to allow (or deny) access to application marketplaces by user role or device and to grant (or deny) access to applications by type, source or category. This unique capability will let IT organizations balance the individual freedom of users with the enterprise-class policies on security and cost efficiency.

"The promise of mobile Unified Communications and Collaboration for decentralized, accelerated decision-making is coming to light with the advent of intelligent 4G LTE networks, the cloud and enterprise tools such as the Cisco Cius. Our sales teams and customers will continue to benefit from cloud-based enterprise apps that help them get the job done from virtually anywhere with greater collaboration and speedier service delivery to their customers," said Mike Smith, vice president enterprise communications, network and mobility, Verizon.

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Demand for Managed Multi-Service Business Gateways

We're clearly in a period of global IT market transition. Enterprises are moving more applications, data and associated services to the central data center. Meanwhile, more small and medium-sized businesses (SMBs) are relying on managed service providers to deliver various types of hosted service offerings.

These trends are driven by cost savings that are realized through consolidation -- the impact reaches beyond basic data processing requirements, as it also impacts traditional voice communication needs.

SMBs are turning to hosted Centrex service, and enterprises are moving PBX capability and SIP trunking -- a VoIP solution based on SIP protocol -- to the unified data center.

Looking to support less infrastructure on-site, branch offices and SMBs are able to consolidate multiple services into a multi-service business gateway (MSBG). According to the latest market study by In-Stat, they have forecast that the growth of MSBG revenues in the SMB market will exceed $1 billion in 2015.

"The health of the MSBG market is closely linked to the health of the worldwide economy," says Norm Bogen, VP Research at In-Stat.

Economic growth leads to the establishment of new businesses and branch offices -- essentially driving new demand for MSBGs. However, the pace of new branch offices worldwide is expected to slow over the next five years, but this will be offset by acceleration in the establishment of small businesses.

As the economy recovers, new and evolving small businesses will flourish -- plus new technology, including the MSBG, will enable small firms to be more competitive with larger firms.

In-Stat's latest market study findings include:

- Revenues generated from MSBG sales are expected to grow at a lower rate than unit shipments.

- Worldwide annual shipments of MSBGs will approach 1.8 million units by 2015.

- Cisco has gained an overwhelming share of the MSBG market.

- Nearly all MSBGs marketed for enterprise branch office applications will need to offer some form of unified communications functionality.

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City Services Delivered Over Mobile Cloud Infrastructure

Busan Metropolitan City launched a center to host a variety of services for its citizens. Operating like an app store for developers, the Busan Mobile Application Development Center (BMAC), marks the first phase of their deployment of Smart+Connected Community (S+CC) services -- in collaboration with Cisco and a local service provider, Korea Telecom (KT).

The plan is part of the Busan Green u-City (ubiquitous city) blueprint, which is in line with the national agenda to support environmentally sustainable economic growth in the country.

Busan, a bustling city of approximately 3.6 million residents, is located on the southeastern tip of the Korean peninsula. The second-largest city in South Korea, Busan occupies about 300 square miles (766 square kilometers), 8 percent of the entire Korean peninsula. Busan also has the country's largest container-handling port (fifth largest in the world) -- thanks to its accessibility from the Pacific Ocean, deep harbor and gentle tides.

Cisco Korea and Cisco's Internet Business Solutions Group (IBSG) contributed to this blueprint, which includes the rollout of S+CC services such as urban mobility, distance learning, energy management, and safety and security by 2014.

The aim is to transform the way of life for Busan citizens, improve city management, and generate new economic growth in a sustainable environment.

"Busan is an advanced city and among the first to adopt the u-City concept in Korea. Because of its ICT infrastructure, Busan has decided to move faster toward becoming a green u-City. We are pleased to be able to collaborate with Cisco due to its rich experience in a variety of smart city projects," said Hur Nam Sik, mayor of Busan.

Cisco Smart+Connected Communities in Action

BMAC is phase 1 of Busan's Green u-City blueprint. The center will be based on a platform-as-a-service (PaaS) approach, in collaboration with KT and Cisco, for application developers to test and host city services.

Phase 2 will see the rollout of software-as-a-service (SaaS) managed cloud services, delivered by KT and powered by Cisco, such as billing automation, content management and document management by 2012.

Phase 3, planned for 2014, will see these services widely available to all citizens.

BMAC is built on a platform powered by the Cisco Unified Computing System, the Cisco 4500 backbone and SAN switches.

Busan expects the BMAC to act as a catalyst for app developers to make use of public data provided by Busan Metropolitan Government, which will allow them to develop innovative applications that will appeal to the general public and help improve the quality of life.

By providing a shared services development platform and creating an ecosystem for software developers, Busan expects to see new job opportunities in knowledge industries. Busan also plans to have these developers lead phase 2 of its blueprint, the delivery of S+CC cloud services.

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Shared Vision for the Future of Hosted Collaboration

With the increased reliance on IT from business leaders, it's important for CIOs to understand the concerns of CEOs and the implications they may have on IT, according to Gartner, Inc.

"Business leaders see very uncertain times ahead in 2011, and they must defend growth despite falling business and consumer confidence," said Mark Raskino, vice president and Gartner Fellow.

According to Gartner's assessment, CIOs should target at least one major business process to be revolutionized or obliterated in 2011 or 2012 -- substantively improving how companies collaborate is one example.

BT and Cisco have a shared vision for the future of hosted collaboration and unified communications services, built on their insight across a variety of networked IT and communications services.

The companies' mutual understanding of complex network environments and solution provisioning has helped them deliver superior capability, service, and value with global reach.

BT and Cisco jointly addressed the ongoing transition to hosted collaboration, unified communications and Internet Protocol (IP) telephony services, including the developing demand for IP telephony as a cloud-based service, at the Gartner Symposium ITxpo 2010.

Collaboration: New Realities, Rules and Opportunities
Stephen Bruce, head of UCC and Mobility portfolios for multinational corporations at BT Global Services and Matt Rowan, manager of partner operations at Cisco, discussed the new realities, rules, and opportunities that stem from a cloud computing-based collaboration and unified communications strategy, including the implications of a utility-priced service.

Bruce said, "As more of our customers contemplate their end-of-life traditional telephony environments and look to embrace the cloud, they are obviously interested in the notion of moving their IP telephony applications into the cloud. The carefully planned transition to cloud-based IP telephony can help customers dramatically reduce upfront investment costs while accelerating the adoption of IP telephony and unified communications on a global scale."

Rowan said, "As businesses analyze their options related to the consumption of collaboration solutions, cloud models offer compelling value. We are seeing enormous demand for cloud based collaboration solutions. Customers are asking for a low risk, minimally disruptive transition, and I believe BT offers a solid answer."

BT, in collaboration with Cisco, announced its hosted unified communications and IP telephony service to business customers in the U.S. in June 2010.

The service allows businesses to bring converged voice, mobile and data services to every desktop in their organizations, using BT and Cisco's cloud computing-based technologies. BT can rapidly deploy services to both large and small sites, offering business customers significant savings as well as operational predictability.

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Global Alliance Paves Way for Enterprise Cloud Services

Orange Business Services together with Cisco, EMC and VMware have formed a business alliance, called Flexible 4 Business -- to offer end-to-end cloud computing services for enterprises. This business alliance will help customers easily transition to cloud computing and gain the infrastructure flexibility, cost reduction and business performance optimization cloud computing enables.

Orange Business Services will be the service provider for the business alliance and will deliver the four types of pay-per-use managed cloud solutions based on the industry-leading technologies from the four partners.

Through Orange Business Services cloud portfolio supported by the Flexible 4 Business alliance, enterprises can realize the benefits of having IT as a service without the concern of building their own cloud computing infrastructure. Through a single service provider, customers will be able to accelerate the deployment of highly secure cloud services across their enterprise while reducing management complexity.

Orange Business Services is certified at the highest level by Cisco, EMC, and VMware to bring the network, server, storage, virtualization and management expertise necessary to integrate the entire cloud solution on a global basis. As the service provider in all Flexible 4 Business engagements, Orange Business Services will commit to tiered end-to-end service level agreements (SLAs).

"Orange Business Services has a long heritage in providing managed datacenter services and hosting and has combined this with its networking and security expertise to provide a growing suite of cloud computing services," said Peter Hall, principal analyst at Ovum.

"The Flexible 4 Business alliance brings together leading players in cloud computing so enterprises can have the confidence that solutions, including private cloud, are delivered and managed on a global scale to the highest standards."

Managed Cloud Services offered by Flexible 4 Business:

Infrastructure-as-a-Service (IaaS):
Private cloud: Customized solutions based on Vblock Infrastructure Packages that combine best-in-class virtualization, networking, computing, storage, security, and management technologies from Cisco, EMC and VMware, together with a comprehensive service catalogue (computing, storage, operating systems, middleware) based on platforms hosted in Orange datacenters, sub-parties datacenters or in customers datacenters. The related services are managed by Orange Business Services on an "as-a-service" mode enabling the expected flexibility in a highly secured environment. Back-up services: Highly secure hosted and managed back-up solution delivered as-a-service: evolving and charged according to real usage, enabling customers to benefit from an effective solution that grows with their requirement and does not require initial investments.

Software-as-a-Service (SaaS):
Security services: Enable the ability to offer anti-virus and URL filtering solutions as-a-service. These SaaS solutions enable all users to benefit from immediate protection even when out of the office, and for customers to roll out precise security policies within seconds. Unified communications services: Comprehensive unified communications solution hosted and managed from Orange Business Services datacenters to reduce costs. Services are available from all types of terminals. Administrators can allocate services as required and therefore adapt usage and costs to the precise needs of the company.

"Cloud computing has truly come of age with Flexible 4 Business," said Vivek Badrinath, chief executive officer, Orange Business Services. "Today's business alliance will make cloud computing a reachable reality for global enterprises, providing for our customers' security requirements and mitigating the complexity of technical migration. Orange Business Services has built its reputation catering to the global business needs of multinationals. With industry's top cloud players we will ease the migration for our enterprise customers."

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Enterprise 2.0: Hosted Collaboration Solutions

New cloud-based business technology applications are reinventing workplace collaboration -- to address the needs of forward-looking organizations and their essential employees, in today's more economically frugal operating environment.

Progressive business leaders are breaking down traditional communication silos by creating the environment for key staff to easily connect with peers and readily share information across globally dispersed organizations. How will they be able to fuel this ongoing transformation?

Cisco announced the availability of the Cisco Hosted Collaboration Solution that allows service providers to offer their customers a wide range of collaboration applications -- via the cloud, using a "business technology as a service" model.

The Cisco Hosted Collaboration Solution, which builds on existing hosted Unified Communications offerings, provides customers with unprecedented flexibility in choosing how they deploy collaboration applications throughout their organizations.

"Our customers are eager to put cloud-based unified communications applications to the test. Verizon Business' field trial of Cisco's Hosted Collaboration Solution builds on a proven track record the two companies have established developing and delivering innovative solutions to market, while marking an important milestone on Verizon Business' path to deliver 'Everything-as-a-Service' for our customers worldwide," said Anthony Recine, vice president of networking and communications solutions for Verizon Business.

How On-Demand Solutions Drive Business Agility
The hosted option helps businesses to rapidly deploy collaboration technologies while potentially lowering upfront capital and ongoing operating expenses.

The Cisco Hosted Collaboration Solution gives service providers and integrators the ability to deploy multiple collaboration applications on one server in a virtualized environment and then host those applications for multiple client organizations.

"Delivering our customers the broadest-range and highest-quality hosted unified communications and collaboration services is one of our core businesses. The Cisco Hosted Collaboration Solution will allow us to achieve this goal with an excellent operational efficiency and profitability for our clients," said Paul Molinier, vice president, Unified Communications and Collaboration Business Unit, Orange.

The solution is designed to be run from managed service provider data centers. It's optimized for delivery by the Cisco Unified Computing System, part of the Cisco Unified Service Delivery solution. It's proven to combine the power of the datacenter with the power of the network -- to transform service delivery and build the foundation for cloud services.

Leading service providers will offer one of the most comprehensive collaboration services available and can easily deploy large, multi-customer installations. By using a common infrastructure, providers can potentially save money while delivering their customers a superior user experience -- regardless of the service deployment model (hosted, managed, or on-premise).

"Delivering hosted unified communications and collaboration services is a demanding and complex operation. We're excited to be working with the Cisco Hosted Collaboration Solution, which is designed to simplify operations and deliver services in the most efficient and profitable manner," said Roger Wuethrich-Hasenboehler, executive vice president and member of the board, Swisscom.

Savvy business executives and their IT leaders continue to benefit from the operational efficiencies of out-tasking core business technology applications. They're shifting their internal resources to more strategic initiatives -- while enabling the just-in-time provision of feature rich communications service delivery.

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