Future Thinking of Cloud and Connectivity - Commsday 2016
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By 2020, traditional colocation services are expected to decline significantly due to the growth of cloud computing, resulting in major pricing disruptions in the data center market. Australia is anticipated to have the most expensive broadband in the developed world, exacerbated by regulatory and monopolistic challenges faced by providers like the NBN. With the advent of 5G, connectivity demands will increase, favoring operators with extensive coverage and leading to potential revenue growth despite rising costs in last-mile access services.
Future Thinking of Cloud and Connectivity - Commsday 2016
- 1. SUPERLOOP LIMITED 1 © Superloop - April 2016 Commsday Summit 2016 Presentation Future Thinking
- 2. BY 2020 TRADITIONAL COLOCATION WILL DECLINE
- 3. SUPERLOOP LIMITED 3 BY 2020 TRADITIONAL COLOCATION WILL DECLINE Growth in cloud compute and cloud apps (Google Apps, O365 etc.) Cloud Providers using “build-v-buy” to drive data centre pricing lower. Already seeing major DC providers $/MW decline First wave of significant pricing disruption to be felt as first major wave of Cloud Compute cores to be decommissioned Older specialised corporate “whitespace” DC’s will probably close down Consolidation of DC providers to those with the cheapest cost of capital Best ecosystems last/least affected
- 4. By 2022 CROSS CONNECT REVENUE WILL LIKELY PEAK
- 5. SUPERLOOP LIMITED 5 BY 2022 CROSS CONNECT REVENUE WILL LIKELY PEAK Elastic Interconnection to become the norm Disintermediation of connection to a network/service at a facility to connecting to it on a fabric Merchant Silicon/SDN is already starting to disrupt in terms of capex, cost, functionally, but also footprint/opex, but hit supernova in 2018/2019 40G/100G optic pricing will become commodity Largest Ecosystem “wins” - independence is key
- 6. AUSTRALIA WILL BECOME THE MOST EXPENSIVE BROADBAND IN THE DEVELOPED WORLD
- 7. SUPERLOOP LIMITED 7 AUSTRALIA WILL BECOME THE MOST EXPENSIVE BROADBAND IN THE DEVELOPED WORLD CVC Charge/Congestion Tax - Galactically stupid pricing 121 PoI Tax NBN Monopoly - no natural competitor/no price tension NBN Monopoly further enshrined as Government looks to “sell” and maximise return through protection guarantees (Telstra float anyone?) Cost of international capacity will remain cheaper than cost of CVC costs Compounded as ULL/SS/xDSL services get turned over - TPG greatest affected
- 8. SUPERLOOP LIMITED 8 CHECK OUT TPG ARPU’s
- 9. ‘GOLDEN ERA’ FOR LAST MILE OWNERS
- 10. SUPERLOOP LIMITED 10 ‘GOLDEN ERA’ FOR MAJOR LAST MILE OWNERS All this growth in cloud services require connectivity to premises True convergence of communication using cloud apps will require significant capacity and seamless connectivity in the workplace Operators with critical mass and coverage will continue to grow and increase coverage through incremental sales, scale and consolidation Some potential attempts at disintermediation of the access layer from major cloud providers looking to reduce the cost/barrier to interconnect to their infrastructure
- 11. 5G BECOMES A REAL ALTERNATIVE FOR TPG (AND VODA)
- 12. SUPERLOOP LIMITED 12 5G BECOMES A REAL ALTERNATIVE FOR TPG (AND VODA)
- 13. SUPERLOOP LIMITED 13 5G BECOMES A REAL ALTERNATIVE FOR TPG (AND VODA)
- 14. SUPERLOOP LIMITED 14 TELSTRA’S GRAPH
- 15. BACK OF THE NAPKIN
- 16. SUPERLOOP LIMITED 16 2.6PB WITH AN AVERAGE UTILISATION OF 75% = 2,600,000GB (1Mbps = 10G/day) 260,000Mbps 260,000Mbps/0.75 Peak = 350Gbps 350Gbps>iiNet’s international traffic last year (pre-Netflix affect)
- 17. SUPERLOOP LIMITED 17 TELSTRA LEARNING FOR TPG AND VODA (AND NBN CO.) 4G network ran at 350Gbps nationally without problem 5G with increased spectral efficiency and the right spectrum should produce 500Gbps to 1Tbps+ of access FttB locations doubling up a pico cell/wifi hand-off sites could possibly handle 2Tbps+ of access connectivity
- 18. SUPERLOOP LIMITED 18 WHAT DOES THIS TRANSLATE TO? 2Tbps * $17.50 = $35m/month or $420M per annum in annual CVC savings 1Tbps = 1,000,000 users download 1Mbps concurrently or 300G per month 2Tbps = 2,000,000 users on a 500GB plan with an average 60% utilisation 2Tbps = 10,000,000 users on a 100GB plan with an average utilisation of 60% 10,000,000 users @ $40/month = $4B in revenue Vodafone today has around 5m subs with average $70 ARPU for $3.5B in revenue. Just saying...