TeleGeography Workshop: International Market Trends Sponsored by
Preview of the Action Introduction (Mike van den Bergh, PCCW) International Voice (Tim) Colocation (Jon) Service Pricing (Erik) International Networks (Tim)
A Map from the Age of Discovery
International Voice: A Short and Happy Tale Tim Stronge tstronge@telegeography.com
A Picture of Stasis Global Traffic Rate of Price Decline versus Volume Growth!
A Picture of Stasis Global Traffic Rate of Price Decline versus Volume Growth!
A Picture of Stasis Global Traffic Rate of Price Decline versus Volume Growth!
Underneath the Stasis Change Carrier VoIP versus TDM Interconnects!
Skype s Impact
Destination of Traffic Has Changed International Traffic to Emerging and Advanced Economies!
So, Too, Have Revenues Wholesale Revenues to Emerging and Advanced Economies!
The End And We All Lived Happily Ever After!
Global Colocation Market Trends Jon Hjembo jhjembo@telegeography.com
Outline What are the core data center markets and how fast are they growing? What markets are emerging as secondary regional hubs? How do colocation prices compare across markets?
Core Data Center Markets
Footprints vary considerably Retail Colocation Floor Space, 2014!
Growth rates often inverse to market size Growth in Gross Retail Colocation Space, CAGR 2011-2014!
Secondary Markets
Some secondary hubs much larger than others Retail Colocation Floor Space, 2014!
and growth rates vary considerably Growth in Gross Retail Colocation Space, CAGR 2011-2014!
Pricing Trends
Median prices vary across markets Median Monthly Price per Kilowatt at 4-Kilowatt Density, H1 2014!
and even more within each market Range in Monthly Price per Kilowatt at 4-Kilowatt Density, H1 2014!
Stark contrasts in cross-connect prices Median Monthly Fiber Cross-Connect Price, H1 2014!
but what really counts is the total cost Total Cost of Ownership per Month, Five Cross-Connects, H1 2014!
Colo prices steadier than network prices Median Colo Price per KW and 10 GigE Prices, New York, H2 2013-H1 2014!
Prices expected to remain stable Operator Price Expectations by Metro Area, H1 2014!
Conclusion Core colocation markets have varying growth rates but continual international investment. Some secondary markets are expanding much faster than others. European colocation markets are typically more price-competitive than American and Asian markets, due to lower connectivity pricing.
Network Pricing, Bottom to Top Erik Kreifeldt ekreifeldt@telegeography.com
Pricing stack Bottom layer: Transport Spectrum, waves; by route, carrier, capacity Layer 2: Ethernet Layer 3: IP Transit Top layer: Enterprise EVPN, IP VPN, DIA, Local access
Bottom Layer: Transport Prices
Alien Waves! Unforeseen cable upgrades, huge demand from nontraditional operators Hybrid cable owner/ bandwidth customer model Negotiate on cost not price Operational problems Concept evolved to securing share of capacity Valuation relies on MRCs/ IRUs
100G Transport Price Route Sample Tokyo Frankfurt via Los Angeles, New York, London!
Wave Price Multiples 7x:10x Q4 2014 Trans-Oceanic and Trans-Continental Prices, 10G &100G!
10G Transport Price Route Sample Trans-Atlantic, Europe-Asia, Intra-Asia, Trans-Pacific, U.S.-Latin America!
Prices Vary by Location Q4 2014 10 Gbps Prices and 3-Year CAGR on Global Routes!
Prices Vary by Distance Q4 2014 10 Gbps Prices and 3-Year CAGR on Global Routes!
10G Transport Price Range Example Trans-Pacific Pricing: Los Angeles Tokyo!
Prices Vary by Carrier Price Range by Carrier, 10 Gbps, Los Angeles Tokyo, 2011 2014!
Layer 2: Ethernet Prices
Ethernet Price Route Sample Trans-Atlantic, Europe-Asia, Intra-Asia, Trans-Pacific, U.S.-Latin America!
Ethernet Prices Vary by Location FastE EoMPLS H2 2014 Prices and 3-Year CAGR!
Ethernet Prices Vary by Transport Median GigE Prices by Transport Type and Route, H2 2014!
Ethernet Prevails Over SDH Frankfurt London Capacity Pricing by Transport Type, H2 2014!
Layer 3: Transit Prices
IP Transit Price Sample Europe, Asia, Australia, North & South America!
IPT Declines Easing in Some Cases Q4 2014 10G IPT prices & CAGRs globally!
Pipe & Port Comparison
Pipe & Port vs. Local Transit Transit Plus Transport Prices to Selected Locations, 10G, 2014!
Top Layer: Enterprise Prices
Enterprise Price Sample Europe, Asia, Australia, North & South America!
Comparing Enterprise Options Median 10 Mbps Prices for DIA, EVPN, and IP VPN, Q3 2014!
EVPN tops IP VPN at High Capacity Median Price for IP VPN and EVPN in Frankfurt by Mbps, 2014!
Enterprise Services Growing Prevalence and Growth of Enterprise Products, 2014!
Access Capacities Remain Modest Global Mix of Access Sales by Capacity, H2 2013!
Unit Price from 100G to 10 Mbps Unit Price of 100 Gbps wave vs. 10 Mbps DIA, Los Angeles Tokyo!
Summary Even as product mix and transaction types evolve Network prices fall, from bottom to top, Prices vary by location, carrier, capacity 10G remains primary unit of bandwidth As buyers move to up to 100G and beyond, others will move up to 10G, further enabled by SDN/NFV SDH appeal fading, especially at high capacity Most local access capacities remain low Unit price range between core and access is large
International Networks: Something Old, Something New Tim Stronge tstronge@telegeography.com
Growth Fundamentals Still Solid
Still Plenty of Potential Capacity
Trans-Pacific Potential Capacity Potential Capacity as Currently Announced by Operators!
Trans-Pacific Potential Capacity Potential Capacity with Two New Cables!
Trans-Pacific Potential Capacity Potential Capacity if 100 x 100G Waves per Fiber Pair - All Cables!
What s New? 1: Regional Parity
Trans-Atlantic No Longer Dominant International Internet Bandwidth, 2004!
Trans-Atlantic No Longer Dominant International Internet Bandwidth, 2014!
Regional Price Differences Narrow 10 Gbps Wavelength Price Multiples over London-New York!
What s New? 2: Rise of the Content Provider Networks
Connecting These Things Requires Bandwidth
Private Networks Have Grown Fast
and Are Now Sizeable
and Are Now Sizeable (Whoa.)
There s a Word for This Type of Market Oligopsony
Examples of Oligopsony Oligopsony: market with a few, large buyers Example 1 Cocoa Industry Example 2 Tobacco Industry
FASTER
Monet
What s New? 3: IP Transit Revenue Estimates
IP Transit Volumes
Transit is Fading For Now Transit as a Share of IP Volumes!
Submarine Cables Support IP Transit IPT-Related Revenue: Transport vs. Port Revenues!
Mahalo!