The Internet Singularity, Delayed

In The Internet Singularity, Delayed: Why Limits in Internet Capacity Will Stifle Innovation on the Web, Nemertes performed an in-depth analysis of Internet and IP infrastructure (capacity) and current and projected traffic (demand) with the goal of understanding how each has changed over time, and determining if there will ever be a point at which demand exceeds capacity. 

From the executive summary:

To assess infrastructure capacity, we reviewed details of carrier expenditures and vendor revenues, and compared these against market research studies. To compute demand, we took a unique approach: Instead of modeling user behavior based on measuring the application portfolios that users had currently deployed, and projecting deployment of those applications in future, we looked directly at how user consumption of available bandwidth has changed over time.

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Our findings indicate that although core fiber and switching/routing resources will scale nicely to support virtually any conceivable user demand, Internet access infrastructure, specifically in North America, will likely cease to be adequate for supporting demand within the next three to five years. We estimate the financial investment required by access providers to bridge the gap between demand and capacity ranges from $42 billion to $55 billion, or roughly 60%-70% more than service providers currently plan to invest.

It’s important to stress that failing to make that investment will not cause the Internet to collapse. Instead, the primary impact of the lack of investment will be to throttle innovation” both the technical innovation that leads to increasingly newer and better applications, and the business innovation that relies on those technical innovations and applications to generate value. The next Google, YouTube, or Amazon might not arise, not because of a lack of demand, but due to an inability to fulfill that demand. Rather like osteoporosis, the underinvestment in infrastructure will painlessly and invisibly leach competitiveness out of the economy.

Hat tip to beSpacific. [JH]