Bandwidth Bites Back

Data centers and service providers must adapt to massive changes in the telecom industry

September 29, 2004

2 Min Read
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Internet connectivity we all use it. And, as NDCF is not yet in bestseller paperback form, you are reading this article thanks to it.

Yes, accessing the Internet is becoming as simple as turning on the television. But, as with most things, there’s a catch.

The broadband boom means additional technology investment to support it, including more servers, routers, switches, and so on. That, in turn, means more electrical power and cooling... not exactly more good news for data center managers! (See The Heat Is On.)

What it also means is an additional investment in software to protect against distributed denial of service (DDOS) attacks, which occur when a system is flooded with incoming messages. This is a strange one, because Internet service providers (ISPs) don’t really want to encourage the defense against DDOS attacks.

This is because an attack is launched by literally saturating the network with traffic, which means that the ISP gets more revenue as usage increases. However, this doesn't take into account the frustration that DDOS attacks cause customers. As a result, reputable providers and ISPs are taking this matter very seriously indeed. Broadband providers beware! Ignore DDOS at your peril! Yeaagh!Darwin’s theory of evolution applies to the telecom market – it is not the strongest that survive, but the most adaptable. And changes are taking place in the behavior of telecom firms: Peer-to-peer technology is becoming more and more popular, and bandwidth providers are much more inclined to barter services among themselves than actually to buy from each other.

Meanwhile, corporate pricing for raw bandwidth, having dropped like a stone over the past 18 months, is now bottoming out at a level that will be sustainable only by the biggest of the big providers. As a result of the pricing pressure, the big bandwidth players such as Level 3 Communications Inc. (Nasdaq: LVLT) and Colt Telecom Group plc (Nasdaq: COLT; London: CTM.L) are reducing the number of direct customers they have, in an attempt to reduce their cost of sale. In doing so they are creating layers of aggregators and resellers of bandwidth in all shapes and sizes.

These are times of great change in the telecom industry. Of course, as people find more uses for broadband connectivity, data centers will need to offer more diverse services – such as storage area network (SAN) solutions, bandwidth by the minute (rather than by the Megabyte), content management, and digital rights management solutions – to complement the provider's portfolio of offerings.

— Mike Tobin, Chief Executive Officer, Redbus Interhouse plc

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