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| http://www.gilder.com/ | Issue 326.0/February 1,
2008
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HEADLINES:
- The Week / Estimating the Exaflood
- Friday Feature / Ken Fisher: We’re Too Gloomy
- Friday
Blogger Bonus / Gilder: A
Breakdown of the Innovation Culture?
- Readings /
The
Week /
Estimating the Exaflood
George Gilder and Bret Swanson (01.29.08): The Impact of Video and Rich Media on the Internet – A
‘zettabyte’ by 2015?
An
upsurge of technological change and a rising tide of new forms of data are
working a deep transformation of the Internet’s capabilities and uses. In this
third phase of Net evolution, network architectures and commercial business
plans reflect the dominance of rich video and media traffic.
From YouTube, IPTV, and high-definition images, to “cloud computing” and
ubiquitous mobile cameras—to 3D games, virtual worlds, and photorealistic
telepresence—the new wave is swelling into an exaflood of Internet and
IP traffic. An exabyte is 10 to the 18th. We estimate that by 2015, U.S. IP
traffic could reach an annual total of one zettabyte (1021 bytes), or one
million million billion bytes.
We
began using the term “exaflood” in 2001 to convey the vast gulf between the
total traffic on the nation’s local area networks, then 15 exabytes a month,
and the thousandfold smaller flows across the Internet. We predicted then that
the deployment of broadband networks would bring exafloods of data to the Net.
Today
it is happening. We estimate that in the U.S. by 2015:
- movie downloads and P2P file sharing could
be 100 exabytes
- video calling and virtual windows
could generate 400 exabytes
- “cloud” computing and remote backup could
total 50 exabytes
- Internet video, gaming, and virtual worlds
could produce 200 exabytes
- non-Internet “IPTV” could reach 100
exabytes, and possibly much more
- business IP traffic will generate some 100
exabytes
- other applications (phone, Web, e-mail,
photos, music) could be 50 exabytes
The U.S. Internet of 2015 will be at least 50 times larger than it was in 2006.
Internet growth at these levels will require a dramatic expansion of bandwidth,
storage, and traffic management capabilities in core, edge, metro, and access
networks. A recent Nemertes Research study estimates that these changes will
entail a total new investment of some $137 billion in the worldwide Internet
infrastructure by 2010. In the U.S., currently lagging Asia, the total new
network investments will exceed $100 billion by 2012.
Technology remains the key engine of U.S. economic growth and its competitive
edge. Policies that encourage investment and innovation in our digital and
communications sectors should be among America’s highest national priorities….
Read
the complete paper:
http://www.humanproductivitylab.com/archive_blogs/2008/01/31/estimating_the_exaflood.php
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The Gilder Telecosm Forum To learn how to join this powerful network of
talented, tech-savvy investors and thinkers online daily to debate, discuss,
and decode new and emerging technologies and share valuable and actionable
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today. |
Friday Feature / We’re
Too Gloomy
Ken
Fisher, Forbes.com (1/28/08): Let me make you a solemn promise for 2008. This
year, and for the rest of your life, the U.S. market and economy won't head
markedly one way while the foreign world collectively goes the other. We're too
intertwined globally. Since the foreign economy is twice America's size, and is
strong, America should do well in 2008--better, at any rate, than people
expect.
Yes, we've heard all the problems. Over and over again.
They're well broadcast. And that led to a weak stock market in 2007. In my Jan.
29, 2007 column I predicted that the market (as measured by the Morgan Stanley
would be up 10% to 40% for the year and that "the S&P 500 will be up, but by a lesser
amount." The world was up a shy 9%. My FORBES stock picks, which were
chosen expecting a more vibrant market, did not do well.
Since 1995 FORBES has asked its columnists to compare the performance of their picks with the market. This was my third worst of those 12 years. If you had bought all 60 of my 2007 recommendations you would be up 0.9% right now, assuming you lost 1% to transaction costs. Similarly timed investments in the S&P (without a transaction penalty) would be down a collective 0.5%.
Most of the lackluster performance of my picks came from a very wrong decision
in February to jump into housing stocks. Beazer Homes, my worst choice, was
down 79%. Best choice: Agrium up 100%, as agricultural stocks did well.
I
think we need a whole new type of stock for 2008. Hence, I'm not urging readers
to hold on to my 2007 picks, be it Beazer, Agrium or any of the others.
I'm
still bullish. Why? The larger non-U.S. economy is doing great. America isn't
doing badly….
Read Ken Fisher complete
commentary:
http://www.forbes.com/columnists/forbes/2008/0128/106.html
________________________________________
Friday Blogger Bonus / A Breakdown of the Innovation Culture?
George
Gilder, Gilder Telecosm Forum (1/28/07): In preparation [for the above linked “Exaflood” paper], I read
the November 2007 paper by Nemertes Research: The Internet Singularity
Delayed: Why Limits in Internet Capacity Will Stifle Innovation on the Web.
It is an exemplary supply-side work (low utilization rates signify inadequate
bandwidth rather than lack of demand). Failure to invest in infrastructure will
produce not a breakdown of the Internet but a breakdown of the innovation
culture of the net that brought us YouTube et al.
I recommend the paper to all as a guide to the prospects of our network
processor and hollow router paradigms. It contains a number of obvious errors
(dates reversed on charts (p.22), confusions between zettabits per second and
petabits), and a “What me worry?” approach to huge conflicts between Nemertes
and Odlyzko estimates of global capacity in 2000 (Odlyzko 85 pettabytes
per month; Nemertes 61 exabytes!). Today global access capacity is around a
zettabyte (10 to the 21) per month (2 plus petabits per second), with the U.S.
commanding only one seventh of it (300 Tbps) or 14% while our GDP was close to
20% and our market cap 40% (adjusting for dollar doldrums).
Meanwhile, U.S. investment in infrastructure (capex only) was roughly $5B
out of a global total of $20B and U.S. investment in access equipment (again
capex only) was under $1B or about a fifth of global access investment in capex
($5B plus). But the U.S. out-invests the rest of the world in edge
router/switch connectivity for the metro and high-end enterprise. Enterprise IP
traffic is estimated to be about 1.5 times Internet IP traffic, but convergence
continues.
On page 29, the report contains a breakdown of core and edge router/switch
unit growth that is relevant to our network processor paradigm. On the order of
10 to 15 thousand core routers are sold annually, compared to between 30 and 60
thousand edge and metro routers and literally billions of access nodes of all
kinds. The NPA is a key product for volume production of NPUs for scale and
learning curves.
The other insight is that IPV6 meets the need for addresses but does not
respond to the expansion of router tables that will slow the net in coming
years if it is not remediated. The conclusion is a large need for CAMs,
Knowledge Processors, and other memory and lookup table accelerators.
Nemertes declares that the U.S. confronts a coming bandwidth crunch in
2010, when access constraints will begin seriously to limit investment in
Internet service innovation. The argument is that Moore's law increases in
capacity will yield rising utilization rate and that traffic is supremely
sensitive to utilization rates. In other words, as bandwidth increases we use
it more and innovate more. I believe this. Others don't.
"If we build it, they will come," is the underlying assumption
of Nemertes and me. People laugh but it is true over any run longer than a year
or so.
Read the complete Nemertes Research report:
http://www.nemertes.com/internet_singularity_delayed_why_limits_internet_capacity_will_stifle_innovation_web
To
read more posts by George Gilder and the Gilder Telecosm Forum members, visit http://www.gildertech.com/ and log on
today.
__________________________________________
Readings /
Micron, Intel
Upgrade Memory Chips
http://online.wsj.com/article/SB120184319313334761.html?mod=technology_main_whats_news
Google Beware
http://www.forbes.com/home/markets/2008/02/01/yahoo-profile-takeover-markets-equity-cx_po_0201markets12.html
Microsoft Bids for Yahoo
http://online.wsj.com/article/SB120186587368234937.html?mod=hpp_us_whats_news
Amazon to Buy
Audiobook Seller Audible
http://online.wsj.com/article/SB120178852994132009.html?mod=technology_main_whats_news
__________________________________________
Friday Letter Editor: Mary Collins George / mcollins@gilder.com
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