Tele Geography Workshop International Market Trends Sponsored by
Tele. Geography Workshop: International Market Trends Sponsored by Carlsbad, CA | Washington, DC | Exeter, UK | Singapore | www. telegeography. com | info@telegeography. com
Preview of the Action • • • Introduction (Mike van den Bergh, PCCW) International Voice (Tim) Colocation (Jon) Service Pricing (Erik) International Networks (Tim) Carlsbad, CA | Washington, DC | Exeter, UK | Singapore | www. telegeography. com | info@telegeography. com
A Map from the Age of Discovery Carlsbad, CA | Washington, DC | Exeter, UK | Singapore | www. telegeography. com | info@telegeography. com
International Voice: A Short and Happy Tale Tim Stronge tstronge@telegeography. com Carlsbad, CA | Washington, DC | Exeter, UK | Singapore | www. telegeography. com | info@telegeography. com
A Picture of Stasis Global Traffic Rate of Price Decline versus Volume Growth Carlsbad, CA | Washington, DC | Exeter, UK | Singapore | www. telegeography. com | info@telegeography. com
A Picture of Stasis Global Traffic Rate of Price Decline versus Volume Growth Carlsbad, CA | Washington, DC | Exeter, UK | Singapore | www. telegeography. com | info@telegeography. com
A Picture of Stasis Global Traffic Rate of Price Decline versus Volume Growth Carlsbad, CA | Washington, DC | Exeter, UK | Singapore | www. telegeography. com | info@telegeography. com
Underneath the Stasis … Change Carrier Vo. IP versus TDM Interconnects Carlsbad, CA | Washington, DC | Exeter, UK | Singapore | www. telegeography. com | info@telegeography. com
Skype’s Impact Carlsbad, CA | Washington, DC | Exeter, UK | Singapore | www. telegeography. com | info@telegeography. com
Destination of Traffic Has Changed International Traffic to Emerging and Advanced Economies Carlsbad, CA | Washington, DC | Exeter, UK | Singapore | www. telegeography. com | info@telegeography. com
So, Too, Have Revenues Wholesale Revenues to Emerging and Advanced Economies Carlsbad, CA | Washington, DC | Exeter, UK | Singapore | www. telegeography. com | info@telegeography. com
The End And We All Lived Happily Ever After Carlsbad, CA | Washington, DC | Exeter, UK | Singapore | www. telegeography. com | info@telegeography. com
Global Colocation Market Trends Jon Hjembo jhjembo@telegeography. com Carlsbad, CA | Washington, DC | Exeter, UK | Singapore | www. telegeography. com | info@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? Carlsbad, CA | Washington, DC | Exeter, UK | Singapore | www. telegeography. com | info@telegeography. com
Core Data Center Markets Carlsbad, CA | Washington, DC | Exeter, UK | Singapore | www. telegeography. com | info@telegeography. com
Footprints vary considerably Retail Colocation Floor Space, 2014 Carlsbad, CA | Washington, DC | Exeter, UK | Singapore | www. telegeography. com | info@telegeography. com
Growth rates often inverse to market size Growth in Gross Retail Colocation Space, CAGR 2011 -2014 Carlsbad, CA | Washington, DC | Exeter, UK | Singapore | www. telegeography. com | info@telegeography. com
Secondary Markets Carlsbad, CA | Washington, DC | Exeter, UK | Singapore | www. telegeography. com | info@telegeography. com
Some secondary hubs much larger than others Retail Colocation Floor Space, 2014 Carlsbad, CA | Washington, DC | Exeter, UK | Singapore | www. telegeography. com | info@telegeography. com
…and growth rates vary considerably Growth in Gross Retail Colocation Space, CAGR 2011 -2014 Carlsbad, CA | Washington, DC | Exeter, UK | Singapore | www. telegeography. com | info@telegeography. com
Pricing Trends Carlsbad, CA | Washington, DC | Exeter, UK | Singapore | www. telegeography. com | info@telegeography. com
Median prices vary across markets Median Monthly Price per Kilowatt at 4 -Kilowatt Density, H 1 2014 Carlsbad, CA | Washington, DC | Exeter, UK | Singapore | www. telegeography. com | info@telegeography. com
…and even more within each market Range in Monthly Price per Kilowatt at 4 -Kilowatt Density, H 1 2014 Carlsbad, CA | Washington, DC | Exeter, UK | Singapore | www. telegeography. com | info@telegeography. com
Stark contrasts in cross-connect prices Median Monthly Fiber Cross-Connect Price, H 1 2014 Carlsbad, CA | Washington, DC | Exeter, UK | Singapore | www. telegeography. com | info@telegeography. com
…but what really counts is the total cost Total Cost of Ownership per Month, Five Cross-Connects, H 1 2014 Carlsbad, CA | Washington, DC | Exeter, UK | Singapore | www. telegeography. com | info@telegeography. com
Colo prices steadier than network prices Median Colo Price per KW and 10 Gig. E Prices, New York, H 2 2013 -H 1 2014 Carlsbad, CA | Washington, DC | Exeter, UK | Singapore | www. telegeography. com | info@telegeography. com
Prices expected to remain stable Operator Price Expectations by Metro Area, H 1 2014 Carlsbad, CA | Washington, DC | Exeter, UK | Singapore | www. telegeography. com | info@telegeography. com
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. Carlsbad, CA | Washington, DC | Exeter, UK | Singapore | www. telegeography. com | info@telegeography. com
Network Pricing, Bottom to Top Erik Kreifeldt ekreifeldt@telegeography. com Carlsbad, CA | Washington, DC | Exeter, UK | Singapore | www. telegeography. com | info@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 Carlsbad, CA | Washington, DC | Exeter, UK | Singapore | www. telegeography. com | info@telegeography. com
Bottom Layer: Transport Prices Carlsbad, CA | Washington, DC | Exeter, UK | Singapore | www. telegeography. com | info@telegeography. com
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 Carlsbad, CA | Washington, DC | Exeter, UK | Singapore | www. telegeography. com | info@telegeography. com
100 G Transport Price Route Sample Tokyo–Frankfurt via Los Angeles, New York, London Carlsbad, CA | Washington, DC | Exeter, UK | Singapore | www. telegeography. com | info@telegeography. com
Wave Price Multiples 7 x: 10 x Q 4 2014 Trans-Oceanic and Trans-Continental Prices, 10 G &100 G Carlsbad, CA | Washington, DC | Exeter, UK | Singapore | www. telegeography. com | info@telegeography. com
10 G Transport Price Route Sample Trans-Atlantic, Europe-Asia, Intra-Asia, Trans-Pacific, U. S. -Latin America Carlsbad, CA | Washington, DC | Exeter, UK | Singapore | www. telegeography. com | info@telegeography. com
Prices Vary by Location Q 4 2014 10 Gbps Prices and 3 -Year CAGR on Global Routes Carlsbad, CA | Washington, DC | Exeter, UK | Singapore | www. telegeography. com | info@telegeography. com
Prices Vary by Distance Q 4 2014 10 Gbps Prices and 3 -Year CAGR on Global Routes Carlsbad, CA | Washington, DC | Exeter, UK | Singapore | www. telegeography. com | info@telegeography. com
10 G Transport Price Range Example Trans-Pacific Pricing: Los Angeles–Tokyo Carlsbad, CA | Washington, DC | Exeter, UK | Singapore | www. telegeography. com | info@telegeography. com
Prices Vary by Carrier Price Range by Carrier, 10 Gbps, Los Angeles–Tokyo, 2011– 2014 Carlsbad, CA | Washington, DC | Exeter, UK | Singapore | www. telegeography. com | info@telegeography. com
Layer 2: Ethernet Prices Carlsbad, CA | Washington, DC | Exeter, UK | Singapore | www. telegeography. com | info@telegeography. com
Ethernet Price Route Sample Trans-Atlantic, Europe-Asia, Intra-Asia, Trans-Pacific, U. S. -Latin America Carlsbad, CA | Washington, DC | Exeter, UK | Singapore | www. telegeography. com | info@telegeography. com
Ethernet Prices Vary by Location Fast. E Eo. MPLS H 2 2014 Prices and 3 -Year CAGR Carlsbad, CA | Washington, DC | Exeter, UK | Singapore | www. telegeography. com | info@telegeography. com
Ethernet Prices Vary by Transport Median Gig. E Prices by Transport Type and Route, H 2 2014 Carlsbad, CA | Washington, DC | Exeter, UK | Singapore | www. telegeography. com | info@telegeography. com
Ethernet Prevails Over SDH Frankfurt–London Capacity Pricing by Transport Type, H 2 2014 Carlsbad, CA | Washington, DC | Exeter, UK | Singapore | www. telegeography. com | info@telegeography. com
Layer 3: Transit Prices Carlsbad, CA | Washington, DC | Exeter, UK | Singapore | www. telegeography. com | info@telegeography. com
IP Transit Price Sample Europe, Asia, Australia, North & South America Carlsbad, CA | Washington, DC | Exeter, UK | Singapore | www. telegeography. com | info@telegeography. com
IPT Declines Easing in Some Cases Q 4 2014 10 G IPT prices & CAGRs globally Carlsbad, CA | Washington, DC | Exeter, UK | Singapore | www. telegeography. com | info@telegeography. com
“Pipe & Port” Comparison Carlsbad, CA | Washington, DC | Exeter, UK | Singapore | www. telegeography. com | info@telegeography. com
Pipe & Port vs. Local Transit Plus Transport Prices to Selected Locations, 10 G, 2014 Carlsbad, CA | Washington, DC | Exeter, UK | Singapore | www. telegeography. com | info@telegeography. com
Top Layer: Enterprise Prices Carlsbad, CA | Washington, DC | Exeter, UK | Singapore | www. telegeography. com | info@telegeography. com
Enterprise Price Sample Europe, Asia, Australia, North & South America Carlsbad, CA | Washington, DC | Exeter, UK | Singapore | www. telegeography. com | info@telegeography. com
Comparing Enterprise Options Median 10 Mbps Prices for DIA, EVPN, and IP VPN, Q 3 2014 Carlsbad, CA | Washington, DC | Exeter, UK | Singapore | www. telegeography. com | info@telegeography. com
EVPN tops IP VPN at High Capacity Median Price for IP VPN and EVPN in Frankfurt by Mbps, 2014 Carlsbad, CA | Washington, DC | Exeter, UK | Singapore | www. telegeography. com | info@telegeography. com
Enterprise Services Growing Prevalence and Growth of Enterprise Products, 2014 Carlsbad, CA | Washington, DC | Exeter, UK | Singapore | www. telegeography. com | info@telegeography. com
Access Capacities Remain Modest Global Mix of Access Sales by Capacity, H 2 2013 Carlsbad, CA | Washington, DC | Exeter, UK | Singapore | www. telegeography. com | info@telegeography. com
Unit Price from 100 G to 10 Mbps Unit Price of 100 Gbps wave vs. 10 Mbps DIA, Los Angeles–Tokyo Carlsbad, CA | Washington, DC | Exeter, UK | Singapore | www. telegeography. com | info@telegeography. com
Summary • Even as product mix and transaction types evolve – Network prices fall, from bottom to top, – Prices vary by location, carrier, capacity • 10 G remains primary unit of bandwidth – As buyers move to up to 100 G and beyond, others will move up to 10 G, 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 Carlsbad, CA | Washington, DC | Exeter, UK | Singapore | www. telegeography. com | info@telegeography. com
International Networks: Something Old, Something New Tim Stronge tstronge@telegeography. com Carlsbad, CA | Washington, DC | Exeter, UK | Singapore | www. telegeography. com | info@telegeography. com
Growth Fundamentals Still Solid Carlsbad, CA | Washington, DC | Exeter, UK | Singapore | www. telegeography. com | info@telegeography. com
Still Plenty of Potential Capacity Carlsbad, CA | Washington, DC | Exeter, UK | Singapore | www. telegeography. com | info@telegeography. com
Trans-Pacific Potential Capacity as Currently Announced by Operators Carlsbad, CA | Washington, DC | Exeter, UK | Singapore | www. telegeography. com | info@telegeography. com
Trans-Pacific Potential Capacity with Two New Cables Carlsbad, CA | Washington, DC | Exeter, UK | Singapore | www. telegeography. com | info@telegeography. com
Trans-Pacific Potential Capacity if 100 x 100 G Waves per Fiber Pair - All Cables Carlsbad, CA | Washington, DC | Exeter, UK | Singapore | www. telegeography. com | info@telegeography. com
What’s New? 1: Regional Parity Carlsbad, CA | Washington, DC | Exeter, UK | Singapore | www. telegeography. com | info@telegeography. com
Trans-Atlantic No Longer Dominant International Internet Bandwidth, 2004 Carlsbad, CA | Washington, DC | Exeter, UK | Singapore | www. telegeography. com | info@telegeography. com
Trans-Atlantic No Longer Dominant International Internet Bandwidth, 2014 Carlsbad, CA | Washington, DC | Exeter, UK | Singapore | www. telegeography. com | info@telegeography. com
Regional Price Differences Narrow 10 Gbps Wavelength Price Multiples over London-New York Carlsbad, CA | Washington, DC | Exeter, UK | Singapore | www. telegeography. com | info@telegeography. com
What’s New? 2: Rise of the Content Provider Networks Carlsbad, CA | Washington, DC | Exeter, UK | Singapore | www. telegeography. com | info@telegeography. com
Connecting These Things Requires Bandwidth Carlsbad, CA | Washington, DC | Exeter, UK | Singapore | www. telegeography. com | info@telegeography. com
Private Networks Have Grown Fast Carlsbad, CA | Washington, DC | Exeter, UK | Singapore | www. telegeography. com | info@telegeography. com
… and Are Now Sizeable Carlsbad, CA | Washington, DC | Exeter, UK | Singapore | www. telegeography. com | info@telegeography. com
… and Are Now Sizeable (Whoa. ) Carlsbad, CA | Washington, DC | Exeter, UK | Singapore | www. telegeography. com | info@telegeography. com
There’s a Word for This Type of Market “Oligopsony” Carlsbad, CA | Washington, DC | Exeter, UK | Singapore | www. telegeography. com | info@telegeography. com
Examples of Oligopsony • Oligopsony: market with a few, large buyers • Example 1 – Cocoa Industry • Example 2 – Tobacco Industry Carlsbad, CA | Washington, DC | Exeter, UK | Singapore | www. telegeography. com | info@telegeography. com
FASTER Carlsbad, CA | Washington, DC | Exeter, UK | Singapore | www. telegeography. com | info@telegeography. com
Monet Carlsbad, CA | Washington, DC | Exeter, UK | Singapore | www. telegeography. com | info@telegeography. com
What’s New? 3: IP Transit Revenue Estimates Carlsbad, CA | Washington, DC | Exeter, UK | Singapore | www. telegeography. com | info@telegeography. com
IP Transit Volumes Carlsbad, CA | Washington, DC | Exeter, UK | Singapore | www. telegeography. com | info@telegeography. com
Transit is Fading … For Now Transit as a Share of IP Volumes Carlsbad, CA | Washington, DC | Exeter, UK | Singapore | www. telegeography. com | info@telegeography. com
Submarine Cables Support IP Transit IPT-Related Revenue: Transport vs. Port Revenues Carlsbad, CA | Washington, DC | Exeter, UK | Singapore | www. telegeography. com | info@telegeography. com
Mahalo! Carlsbad, CA | Washington, DC | Exeter, UK | Singapore | www. telegeography. com | info@telegeography. com
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