Bandwidth Metering II

A prominent subject for my blog has been bandwidth metering.  The GigaOM site had some interesting discussion on bandwidth and capacity trends.  The capacity versus bandwidth chart was the most interesting chart to me.  The last chart shows that storage capacity is outstripping the bandwidth made available in the network; hence the network has been lagging the advances in compute and storage.

This is not the first time I have pointed this out and why I am not a believer in the exaflood thesis as a growth driver for networking companies.  There is a cruel humorous aspect to the future.  It rarely unfolds the way you think it will and it is often unevenly distributed.  Maybe that is why there are now weekly notes on price erosion in the ethernet switching market.  The legacy tail of networking infrastructure is not keeping pace with the other dislocations in the tech ecosystem.  More expensive hardware in the GPM range of 60-70 points is not going to solve the network from lagging the growth of the other parts of the tech ecosystem.

This brings us back to bandwidth metering and usage caps. When it costs a lot to deploy a network, you limit the use of the network.  That is how networks were built in the in years before the client/server network.  Most people forget, but even Novell had usage based caps built into their software.  When I built my first Novell server, one of the options in the setup was to create usage caps for users, groups and time blocks.  This was clearly a leftover from the mainframe era as it was not really necessary on a LAN, but traditions are hard to remove.  Fast forward more than twenty years and service providers are still limiting the use of the network because bandwidth is not free (it is expensive) and they are charging more for premium users because growth of the other parts of the tech ecosystem have been putting pressure on the network.

So how is the future going to unfold for networking companies?  There are only guesses and some guesses are better than others.  I think expensive network infrastructure means that service providers respond with higher prices (caps and tiers) and within the data center/enterprise market new forces emerge.  I have written extensively about this in the past two months.  I think succinctly summarized it in my 06.24.11 post “#2 Infrastructure Vendors Create 4th Leg: Shared cache concept and I think this is big, but this is the part of the network evolution that I wrote is really two networks: a network for humans and a network for machines to maintain a shared cache.  I believe in point #2, but maybe in a different way.  I really think that more VMs on a blade and I/O virtualization are a big way to achieve statistical gain.  I also think this is going to put pressure on the network element to do something different.  Network vendors that can integrate the network element into the I/O of the compute element are going to be very valuable.  Application delivery controllers (ADCs) become a virtual (i.e. software control) capability that is stretched across the compute/IO/network element.  This will allow it to scale and achieve maximize stat gain.  The networking vendor that figures this out with #6 below = big time winners.”

Some Random Notes for the Macro Inclined

I compiled a list of dates and events from my friends at DB and ISI for the European Summer Vacation 2011….actually one of the notes said “don’t go on vacation.”  Here it is:

• 27-30 June (unconfirmed): Greek parliament debates and votes on austerity.  There will be two votes.
• 3 July: EU finance ministers to approve fifth loan tranche.
• Early July: IMF Board to approve fifth loan tranche.
• 7 July: ECB meeting.
• 11 July: EU finance ministers to approve new Greek loan program.
• 15 July: Greek sovereign liability due.
• The EU vowed to rescue Greece, but markets closed Friday still little reassured, eg, Spain 10-year above the firewall at 5.68%, Greece stock market -1.7% w/w, Italy stock market -4.7%, and STOXX Europe Banks index down -1.6% d/d.
• Trichet said risk signals “Red Alert” as the crisis threatens banks.  Mervyn King said the crisis in Europe is a major threat to British banks. Moody’s warned Italian banks and 2 government institutions they were on watch for a ratings downgrade.
• Wen said China inflation rate will be “firmly under control” and pointed to a moderation in lending, an “oversupply of industrial products, and abundant grain.”  China mfg PMI of input prices declined to 53.1% in June versus its recent peak of 83.2%. China mfg PMI slipped to 50.1% in June with China Daily reporting “China’s mfg sees sizable slowdown.”

/wrk

* It is all about the network stupid, because it is all about compute. *

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