STF ANALYTICS

ANALYTICS

BY REBECCA SPENCE

Reprinted from Submarine Telecoms Industry Report – 2021/2022 Edition

Data center providers have become an increasingly integral part of the submarine telecommunications ecosystem over the last several years. As a result, one of the biggest dynamic changes has been to place data center and colocation facilities closer to cable landing stations in order to maximize interconnection and network services. Building these facilities next to – or even as part of – the cable landing station reduces network latency and streamlines infrastructure.

This type of configuration is especially attractive for cable landing stations that house multiple cable systems as they provide access to a much wider away of customers and interconnection opportunities. For instance, the cable landing facilities in Marseille, France, house thirteen international submarine cables and provide access to dozens of potential customers needing both interconnection and onward backhaul connectivity. (SubTel Forum Analytics Division of Submarine Telecoms Forum, Inc., 2020)

CLOUD ADOPTION

Cloud adoption is at an all-time high as companies continue to shift towards both cloud storage and cloud computing to drive their business. Amazon Web Services and Microsoft Azure lead the way in enterprise adoption with no sign of slowing down. (Figure 81) These cloud services are global in nature and inevitably their traffic will end up traveling over submarine telecommunications cables. As a result, data center providers have become more involved with the submarine fiber industry, especially around cable landing stations where they can capitalize on interconnection and colocation opportunities – especially in those areas where multiple cables come ashore to a single location.

In January 2020, Flexera surveyed 750 enterprise technical professionals about their cloud computing adoption. Of these respondents, 94 percent have adopted the use of cloud computing in some fashion with organizations leveraging five different cloud services on average. Spending on enterprise cloud is growing sig-

Figure 1: Enterprise Public Cloud Provider Usage, 2021 (Flexera, 2021)

In January 2020, Flexera surveyed 750 enterprise technical professionals about their cloud computing adoption. Of these respondents, 94 percent have adopted the use of cloud computing in some fashion with organizations leveraging five different cloud services on average.

nificantly with companies planning to spend 47 percent more on public cloud in 2021 vs 2020. In all, 36 percent of respondents spend more than $12 million on public cloud services on an annual basis while 83 percent spend more than $1.2 million annually. (Flexera, 2021)

These numbers show that the cloud computing market continues to accelerate overall. As this market grows, so will data center providers and the need to provide robust telecommunications networks that allow enterprise customers to efficiently manage their traffic anywhere in the world. A key part of this will be the integration of data centers with cable landing stations to efficiently provide more backhaul and interconnection opportunities on international telecommunications routes.

DATA CENTER MARKET EXPANSION AND INTEGRATION

The cost for implementing a new data center can be steep. Depending on overall size and location, building a new data center can cost anywhere from $6.5 to $10 million per megawatt (MW). (Diaz, 2019) In 2019 alone, data center provider Equinix planned to spend nearly $2 billion to open 12 new International Business Exchange (IBX) and expand 23 existing IBX facilities. (Lima, 2019) Non-Hyperscaler data centers, Equinix, Digital Realty Trust and Interxion, will continue to benefit from submarine cable construction activity as proximity to a cable landing station can provide numerous interconnection opportunities that can help make the high cost of a new data center build worth it.

While non-Hyperscaler data centers do benefit from submarine cable infrastructure, they are not driving new builds and are strictly interested in the interconnection opportunities that being involved with cable landing stations provides. For Equinix and other carrier-neutral providers, locations with only a single cable system are not attractive growth options.

In the future, expect data center providers to continue integrating more closely with submarine cables. Bridging the gap between terrestrial and submarine traffic is one of the most critical components of international connectivity. Traditionally, submarine fiber systems would come ashore at a cable landing station, negotiate deals for backhaul connectivity to a data center – which was not always close by – and from there negotiate interconnection services to other carriers and providers. This would add network latency and complexity – both of which are greatly reduced when data center and cable landing station facilities are integrated more closely. As new ideas and technologies are developed towards this effort, network efficiency and reliability will increase.STF

Figure 2: Enterprise Public Cloud Provider Adoption Rate, 2020-2021 (Flexera, 2021)

REBECCA SPENCE is the Project Manager from Submarine Telecoms Forum. Rebecca possessed more than 10 years’ experience as an analyst and database manager, including for the small business division of prominent fovernment contractor, General Dynamics IT. She is a regular contributor to SubTel Forum Magainze and is based out of Hillsborough, North Carolina USA.!