Published: April 9, 2020
Introduction
In late March, network monitoring vendor Kentik hosted a virtual panel session with Netflix, Zoom, Dropbox and Equinix, discussing how the coronavirus outbreak has affected each company's operations. They say their services and networks have held up to the anticipated surge in traffic, and the same appears to be true of the internet core, as well. A common thread during the Kentik session was that services have simply accelerating their 2020 growth plans, meaning they have coped but have absorbed any safety buffer that was in place. The next step is to brace for further traffic increases, assuming social isolation rules will remain in effect for some time.
The 451 Take
The picture has not been universally rosy. According to analysis by ThousandEyes, UCaaS, VPNs and related applications appear to have encountered performance issues as traffic surged in early to mid-March. Network provider Cogent experienced brief but noteworthy outages on March 11 and 18. On a large scale, internet providers and internet-dependent services have absorbed the new traffic. There has been little trouble with the internet backbone, which is not surprising considering those networks are designed to carry peak capacity plus overhead. A more likely place to look for problems would be in metro networks and local broadband systems. Meanwhile, core-network owners, including datacenter operators, can't rest on their laurels – crisis-related bandwidth demand will likely continue to grow, and there is a chance that some of these new traffic patterns are here to stay.
Coronavirus has not Broken the Internet
Kentik's online event, held on March 25, was intended as a snapshot of services strongly affected by shelter-in-place and work-from-home edicts. All four participants (not including Kentik) are based in the San Francisco Bay Area, which on March 17 became the first US region to enact formal shelter-in-place orders. While it is no surprise that services like Netflix and Zoom are seeing increased network traffic – Zoom grew to 200 million users in March – these companies have also encountered other lockdown-related issues, such as supply-chain disruptions and questions about how to deploy their own workforces. (Zoom has also encountered privacy concerns that were not discussed on the call.)
They will also have to consider whether some of the workplace changes occurring now could become permanent. In 451 Research's Voice of the Enterprise: Digital Pulse, Coronavirus Flash Survey March 2020, 37.8% of enterprises said they believe expanded work-from-home policies will remain in place for the long term, if not permanently. This sentiment was strongest in EMEA, where 55.2% of respondents felt this way. It was also stronger with larger companies: Among those with 1,000 or more employees, 46.8% believe a new work-from-home policy could remain for the long term, compared with 30.1% at smaller companies.
They will also have to consider whether some of the workplace changes occurring now could become permanent. In 451 Research's Voice of the Enterprise: Digital Pulse, Coronavirus Flash Survey March 2020, 37.8% of enterprises said they believe expanded work-from-home policies will remain in place for the long term, if not permanently. This sentiment was strongest in EMEA, where 55.2% of respondents felt this way. It was also stronger with larger companies: Among those with 1,000 or more employees, 46.8% believe a new work-from-home policy could remain for the long term, compared with 30.1% at smaller companies.
Crisis Tactics
Operators build networks to accommodate peak traffic levels. Zoom, for instance, aims to have 50% more capacity than is needed on average (and has raced to keep to that standard in recent weeks). Thus, while overall internet traffic has increased, core networks had the headroom for it. Furthermore, Equinix notes that some backbone networks, including its own, were in the process of upgrading to 100Gbps, creating a pocket of overhead.
Netflix throttled video delivery in the EU, but that was a precaution, not a forced action. Netflix says the EU initially wanted all video capped at SD quality – a step Google, which owns YouTube, has taken – but Netflix says it found other ways to immediately gain 25% efficiency.
Netflix had less luck with its supply chain. That was partly due to high demand, but Netflix also relies on a Silicon Valley-based server supplier that had to pause its operations when shelter-in-place took effect. Netflix resolved that problem quickly, and is looking ahead, planning for the likelihood of prolonged isolation orders.
An interesting wrinkle to Netflix's situation is its original programming. With production stopped and California's shelter-in-place orders likely to persist, Netflix is investigating how effectively video post-production and computer animation could be done from home. We would imagine the difficulties would lie not only in bandwidth requirements (the files involved are enormous) but also in the collaborative nature of creative projects. Security would be an issue, as well.
To ensure safe working environments, Equinix is setting limits on physical access to its datacenters – for employees as well as customers – in Germany, Italy and France. Other datacenter operators, such as Digital Realty with its recent acquisition of Interxion, have done the same.
Equinix has observed a general increase in interconnection requests – services including direct cloud connectivity, peering, virtual routers or VPN aggregation. The company describes this as an acceleration of trends it was already anticipating, and we believe the same is true for other multi-tenant datacenter operators. If demand for cross-connects continues to rise, the ability to create those connections in software – an element of what 451 Research calls software-programmable interconnection – could be a differentiator, whether provided internally (such as Equinx's ECX Fabric) or with a partner (such as Digital Realty's Service Exchange, created with Megaport).
Dropbox notes an increase in customers requesting direct connections to its service. These would be analogous to direct cloud connections such as AWS Direct Connect or Azure ExpressRoute, where traffic travels on a private connection rather than the open internet. It is unclear whether the new requests are coronavirus-related because the trend started in 2019 and is driven by concerns over security rather than performance.
Despite the lack of global network catastrophes so far, panelists are bracing for traffic to continue to grow. It's a probable scenario. For example, note that 18% of US adults polled by Kagan (a media research group within the TMT offering of S&P Global Market Intelligence) from March 27-29 said they intended to add an online streaming service within 90 days. The public cloud can certainly help scale up services as necessary, a factor that has already helped Dropbox, Netflix and Zoom. Scaling up datacenter presences presents more of a challenge, but is certainly doable.
Netflix throttled video delivery in the EU, but that was a precaution, not a forced action. Netflix says the EU initially wanted all video capped at SD quality – a step Google, which owns YouTube, has taken – but Netflix says it found other ways to immediately gain 25% efficiency.
Netflix had less luck with its supply chain. That was partly due to high demand, but Netflix also relies on a Silicon Valley-based server supplier that had to pause its operations when shelter-in-place took effect. Netflix resolved that problem quickly, and is looking ahead, planning for the likelihood of prolonged isolation orders.
An interesting wrinkle to Netflix's situation is its original programming. With production stopped and California's shelter-in-place orders likely to persist, Netflix is investigating how effectively video post-production and computer animation could be done from home. We would imagine the difficulties would lie not only in bandwidth requirements (the files involved are enormous) but also in the collaborative nature of creative projects. Security would be an issue, as well.
To ensure safe working environments, Equinix is setting limits on physical access to its datacenters – for employees as well as customers – in Germany, Italy and France. Other datacenter operators, such as Digital Realty with its recent acquisition of Interxion, have done the same.
Equinix has observed a general increase in interconnection requests – services including direct cloud connectivity, peering, virtual routers or VPN aggregation. The company describes this as an acceleration of trends it was already anticipating, and we believe the same is true for other multi-tenant datacenter operators. If demand for cross-connects continues to rise, the ability to create those connections in software – an element of what 451 Research calls software-programmable interconnection – could be a differentiator, whether provided internally (such as Equinx's ECX Fabric) or with a partner (such as Digital Realty's Service Exchange, created with Megaport).
Dropbox notes an increase in customers requesting direct connections to its service. These would be analogous to direct cloud connections such as AWS Direct Connect or Azure ExpressRoute, where traffic travels on a private connection rather than the open internet. It is unclear whether the new requests are coronavirus-related because the trend started in 2019 and is driven by concerns over security rather than performance.
Despite the lack of global network catastrophes so far, panelists are bracing for traffic to continue to grow. It's a probable scenario. For example, note that 18% of US adults polled by Kagan (a media research group within the TMT offering of S&P Global Market Intelligence) from March 27-29 said they intended to add an online streaming service within 90 days. The public cloud can certainly help scale up services as necessary, a factor that has already helped Dropbox, Netflix and Zoom. Scaling up datacenter presences presents more of a challenge, but is certainly doable.
The Local Network
The internet backbone might be absorbing the new traffic, but it has still required work from service providers to keep up. Internet backbone provider Telia Carrier reports that, as March's isolation practices took hold, traffic in Europe still peaked in the evening, but traffic at all hours was significantly higher and more evenly distributed. The curve resembles that of a typical Sunday, pre-coronavirus.
This growth could be difficult for some residential broadband networks. For example, traditional cable modem systems share bandwidth among subscribers, so that one home's spike in videoconferencing could potentially affect the neighbors' broadband. Moreover, many residential networks are asymmetrical – they are built for more traffic to come downstream (from the ISP down to the home) than upstream. Video streaming creates a different balance, and some ISPs will need time to adjust.
The surge in residential bandwidth usage is real, and in the US it was abrupt, according to a combined analysis by OpenVault and Kagan, a media research group within the TMT offering of S&P Global Market Intelligence (451 Research is an offering of S&P Global Market Intelligence). Households' downstream bandwidth consumption averaged 3.0GB per workday during March 2-6. The average in the following work week (March 9-13) was 3.8GB.
This growth could be difficult for some residential broadband networks. For example, traditional cable modem systems share bandwidth among subscribers, so that one home's spike in videoconferencing could potentially affect the neighbors' broadband. Moreover, many residential networks are asymmetrical – they are built for more traffic to come downstream (from the ISP down to the home) than upstream. Video streaming creates a different balance, and some ISPs will need time to adjust.
The surge in residential bandwidth usage is real, and in the US it was abrupt, according to a combined analysis by OpenVault and Kagan, a media research group within the TMT offering of S&P Global Market Intelligence (451 Research is an offering of S&P Global Market Intelligence). Households' downstream bandwidth consumption averaged 3.0GB per workday during March 2-6. The average in the following work week (March 9-13) was 3.8GB.
CRAIG MATSUMOTO
Senior Analyst, Datacenter Networking
Craig Matsumoto is a 451 Senior Analyst focusing on the confluence of CDNs, interconnect fabrics and cloud access. Craig has covered service-provider and enterprise networking since the dot-com bubble of 1999, including more than 10 years at Light Reading, where he covered broad topics including optical networking, routing and the then-new beat of software-defined networking.
Jeremy Korn
Research Associate
Jeremy Korn is a Research Associate at 451 Research. He graduated from Brown University with a BA in Biology and East Asian Studies and received
Aaron Sherrill
Senior Analyst
Aaron Sherrill is a Senior Analyst for 451 Research covering emerging trends, innovation