Cisco Systems (NASDAQ: CSCO) put out its annual Visual Networking Index (VNI) forecast for 2011 to 2016. The huge router company projects the Internet will be four times as large in four years as it will be this year. The “wired” world, which has changed human interaction and the growth of the availability of information, will explode, if Cisco is correct.
It is hard to find an analogue to this expansion in recent business and social history. Perhaps the growth of the number of TV sets or cable use. Or, maybe the growth of car ownership at the beginning of the last century. At any rate, the growth cannot be matched by anything that has happened in recent memory. The Cisco forecast means that billions of people will be tethered to the Internet. Cisco does not believe its job is to say what the impact of this will be, but there are some reasonable guesses.
The path to the fourfold increase includes these things:
The weight of video use is likely to be the greatest burden on Internet systems. While news is probably a large part of this, entertainment is likely to be larger. Businesses modeled on companies like Netflix (NASDAQ: NFLX) and Google’s (NASDAQ: GOOG) YouTube will expand not just in America and Europe. Similar companies will be established in the most populous nations, with the largest probably coming from China, Russia and much of South America. No one knows yet from where the content for these new businesses, whether or not they are legitimate, will come. If the past is any indication, a great deal will originate from U.S. studios. It will either be a revenue windfall for them or part of the growing trouble with piracy.
by Douglas A. McIntyre, 24/7 Wall Street | Read more:
It is hard to find an analogue to this expansion in recent business and social history. Perhaps the growth of the number of TV sets or cable use. Or, maybe the growth of car ownership at the beginning of the last century. At any rate, the growth cannot be matched by anything that has happened in recent memory. The Cisco forecast means that billions of people will be tethered to the Internet. Cisco does not believe its job is to say what the impact of this will be, but there are some reasonable guesses.
The path to the fourfold increase includes these things:
It is to Cisco’s advantage to make telecom, cable and wireless providers believe these numbers, because the increased use of the company’s routers will be needed to carry the burgeoning load. But, based on recent history, it is not hard to believe that Cisco is right — at least directionally.
- By 2016, the forecast projects there will be nearly 18.9 billion network connections — almost 2.5 connections for each person on earth — compared with 10.3 billion in 2011.
- By 2016, there are expected to be 3.4 billion Internet users — about 45% of the world’s projected population, according to UN estimates.
- The average fixed broadband speed is expected to increase nearly fourfold, from 9 megabits per second (Mbps) in 2011 to 34 Mbps in 2016.
- By 2016, 1.2 million video minutes — the equivalent of 833 days (or more than two years) — will travel the Internet every second.
The weight of video use is likely to be the greatest burden on Internet systems. While news is probably a large part of this, entertainment is likely to be larger. Businesses modeled on companies like Netflix (NASDAQ: NFLX) and Google’s (NASDAQ: GOOG) YouTube will expand not just in America and Europe. Similar companies will be established in the most populous nations, with the largest probably coming from China, Russia and much of South America. No one knows yet from where the content for these new businesses, whether or not they are legitimate, will come. If the past is any indication, a great deal will originate from U.S. studios. It will either be a revenue windfall for them or part of the growing trouble with piracy.
by Douglas A. McIntyre, 24/7 Wall Street | Read more:
