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Higher Stakes with Web 2.0 Undersea Apps

One of the most interesting discussions at the OIDA Executive Forum Program will be the panel on “Internet Content Providers Building Out Undersea Networks – What Does This Mean for Everyone Else?” As far as the world is concerned, the answer to the question can hardly be exaggerated as the Internet backbone is vitally important. While in our last blog article we pointed out that just about all of the major hyperscale data center operators have in effect been forced to build out at least major portions of their terrestrial networks, because of the combination of the scarcity and cost of available high-speed circuits, the lack of adequate investment in submarine networks in recent years has resulted in these Web 2.0 companies perhaps having even fewer, if any, options, but to invest hefty amounts of money in wet infrastructure. Raising the stakes even further is that in some cases there are geopolitical ramifications, which result in greater participation in consortia, raising the costs of these projects as well as adding complexity, which can lead to delays.

In elaborating on this last point, there is a tendency for a smaller number of players in a new consortium in the Atlantic Ocean or even in South America – a couple of Web 2.0 firms may all be what is necessary. However, often in the Pacific, in Asia, or in the Middle East, the large amount of cash of the big ICPs that would ordinarily determine their own actions cannot overcome the national political sensitivities that become a part of the equation. In other words, frequently a cable cannot be landed in a particular country without the involvement of that nation’s incumbent communication services provider.

The major reason for the ICPs stepping into these applications was to ensure greater predictability and control of the supply chain. They realized that waiting on carriers to try to find out whether they were getting financing over a three- to five-year period simply was not in line with the growth of their bandwidth requirements.

Another significant difference with terrestrial devices (at least in terms of the rhetoric) is in keeping gear in landline networks for a relatively short period of time. With submarine networks, these operators are making 20- to 25-year investments, and nothing is off the table in terms of designing for end-of-life attenuation.

As always, most of the focus at OFC-related events is on vaporware. The extraordinary leap in construction of subsea networks is at least starting to be addressed. It is often the case that attention to the mature types of products actually getting significant sales is inversely proportional to the number of three- and four-letter acronyms associated with bleeding-edge solutions. Nevertheless, it is the case that the bulk of the expense with subsea gear involves installation and engineering, such as the cost of ships. The optics are limited to the two ends and an occasional amplifier. On the other hand, there are only so many fibers (around a dozen or so) that can practically go into a cable anyway. The splicing difficulties (including putting it in a splice case and burying it in the middle of the ocean) for the undersea is vastly different than the situation of a 360-count cable in a manhole on a street.

Please find details on our Clash of Metro 100G Optical Vendors with Shifting Network Paradigm and Clash of Optical Component Vendors & Technologies in Data Center Networks here. For our daily updates, please follow us here.

[written by Mark Lutkowitz]

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