The New York Times reports today that scientists reading human genomes are generating so much data that they must use snail mail instead of the Internet to send the DNA readouts around the globe.

BGI, based in China, is the world’s largest genomics research institute, with 167 DNA sequencers producing the equivalent of 2,000 human genomes a day.

BGI churns out so much data that it often cannot transmit its results to clients or collaborators over the Internet or other communications lines because that would take weeks. Instead, it sends computer disks containing the data, via FedEx.

“It sounds like an analog solution in a digital age,” conceded Sifei He, the head of cloud computing for BGI, formerly known as the Beijing Genomics Institute. But for now, he said, there is no better way.

The field of genomics is caught in a data deluge. DNA sequencing is becoming faster and cheaper at a pace far outstripping Moore’s law, which describes the rate at which computing gets faster and cheaper.

The result is that the ability to determine DNA sequences is starting to outrun the ability of researchers to store, transmit and especially to analyze the data.

We’ve been talking about the oncoming rush of biomedical data for a while. A human genome consists of some 2.9 billion base pairs, easily stored in around 725 megabytes with standard compression techniques. Two thousand genomes a day, times 725 MB, equals 1,450,000 MB, or 1.45 terabytes. That’s a lot of data for one entity to transmit in a day’s time. Some researchers believe a genome can be losslessly compressed to approximately 4 megabytes. In compressed form, 2,000 genomes would total around 8,000 MB, or just 8 gigabytes. Easily doable for a major institution.

Interested to know more.

AT&T’s announced purchase of T-Mobile is an exaflood acquisition — a response to the overwhelming proliferation of mobile computers and multimedia content and thus network traffic. The iPhone, iPad, and other mobile devices are pushing networks to their limits, and AT&T literally could not build cell sites (and acquire spectrum) fast enough to meet demand for coverage, capacity, and quality. Buying rather than building new capacity improves service today (or nearly today) — not years from now. It’s a home run for the companies — and for consumers.

We’re nearing 300 million mobile subscribers in the U.S., and Strategy Analytics estimates by 2014 we’ll add an additional 60 million connected devices like tablets, kiosks, remote sensors, medical monitors, and cars. All this means more connectivity, more of the time, for more people. Mobile data traffic on AT&T’s network rocketed 8,000% in the last four years. Remember that just a decade ago there was essentially no wireless data traffic. It was all voice traffic. A few rudimentary text applications existed, but not much more. By year-end 2010, AT&T was carrying around 12 petabytes per month of mobile traffic alone. The company expects another 8 to 10-fold rise over the next five years, when its mobile traffic could reach 150 petabytes per month. (We projected this type of growth in a series of reports and articles over the last decade.)

The two companies’ networks and businesses are so complementary that AT&T thinks it can achieve $40 billion in cost savings. That’s more than the $39-billion deal price. Those huge efficiencies should help keep prices low in a market that already boasts the lowest prices in the world (just $0.04 per voice minute versus, say, $0.16 in Europe).

But those who focus only on the price of existing products (like voice minutes) and traditional metrics of “competition,” like how many national service providers there are, will miss the boat. Pushing voice prices down marginally from already low levels is not the paramount objective. Building fourth generation mobile multimedia networks is. Some wonder whether “consolidation of power could eventually lead to higher prices than consumers would otherwise see.” But “otherwise” assumes a future that isn’t going to happen. T-Mobile doesn’t have the spectrum or financial wherewithal to deploy a full 4G network. So the 4G networks of AT&T, Verizon, and Sprint (in addition to Clearwire and LightSquared) would have been competing against the 3G network of T-Mobile. A 3G network can’t compete on price with a 4G network because it can’t offer the same product. In many markets, inferior products can act as partial substitutes for more costly superior products. But in the digital world, next gen products are so much better and cheaper than the previous versions that older products quickly get left behind. Could T-Mobile have milked its 3G network serving mostly voice customers at bargain basement prices? Perhaps. But we already have a number of low-cost, bare-bones mobile voice providers.

The usual worries from the usual suspects in these merger battles go like this: First, assume a perfect market where all products are commodities, capacity is unlimited yet technology doesn’t change, and competitors are many. Then assume a drastic reduction in the number of competitors with no prospect of new market entrants. Then warn that prices could spike. It’s a story that may resemble some world, but not the one in which we live.

The merger’s boost to cell-site density is hugely important and should not be overlooked. Yes, we will simultaneously be deploying lots of new Wi-Fi nodes and femtocells (little mobile nodes in offices and homes), which help achieve greater coverage and capacity, but we still need more macrocells. AT&T’s acquisition will boost its total number of cell sites by 30%. In major markets like New York, San Francisco, and Chicago, the number of AT&T cell sites will grow by 25%-45%. In many areas, total capacity should double.

It’s not easy to build cell sites. You’ve got to find good locations, get local government approvals, acquire (or lease) the sites, plan the network, build the tower and network base station, connect it to your long-haul network with fiber-optic lines, and of course pay for it. In the last 20 years, the number of U.S. cell sites has grown from 5,000 to more than 250,000, but we still don’t have nearly enough. CEO Randall Stephenson says the T-Mobile purchase will achieve almost immediately a network expansion that would have taken five years through AT&T’s existing organic growth plan. Because of the nature of mobile traffic — i.e., it’s mobile and bandwidth is shared — the combination of the two networks should yield a more-than-linear increase in quality improvements. The increased cell-site density will give traffic planners much more flexibility to deliver high-capacity services than if the two companies operated separately.

The U.S. today has the most competitive mobile market in the world (second, perhaps, only to tiny Hong Kong). Yes, it’s true, even after the merger, the U.S. will still have a more “competitive” market than most. But “competition” is often not the most — or even a very — important metric in these fast moving markets. In periods of undershoot, where a technology is not good enough to meet demand on quantity or quality, you often need integration to optimize the interfaces and the overall experience, a la the hand-in-glove paring of the iPhone’s hardware, software, and network. Streaming a video to a tiny piece of plastic in your pocket moving at 60 miles per hour — with thousands of other devices competing for the same bandwidth — is not a commodity service. It’s very difficult. It requires millions of things across the network to go just right. These services often take heroic efforts and huge sums of capital just to make the systems work at all.

Over time technologies overshoot, markets modularize, and small price differences matter more. Products that seem inferior but which are “good enough” then begin to disrupt state-of-the art offerings. This was what happened to the voice minute market over the last 20 years. Voice-over-IP, which initially was just “good enough,” made voice into a commodity. Competition played a big part, though Moore’s law was the chief driver of falling prices. Now that voice is close to free (though still not good enough on many mobile links) and data is king, we see the need for more integration to meet the new challenges of the multimedia exaflood. It’s a never ending, dynamic cycle. (For much more on this view of technology markets, see Harvard Business School’s Clayton Christensen).

The merger will have its critics, but it seriously accelerates the coming of fourth generation mobile networks and the spread of broadband across America.

— Bret Swanson

Mobile communications is among the healthiest of U.S. industries. Through a time of economic peril and now merely uncertainty, mobile innovation hasn’t wavered. It’s been a too-rare bright spot. Huge amounts of infrastructure investment, wildly proliferating software apps, too many devices to count. If anything, the industry is moving so fast on so many fronts that we risk not keeping up with needed capacity.

Mobile, perhaps not coincidentally, has also been historically a quite lightly regulated industry. But emerging is a sort of slow boil of small but many rules, or proposed rules, that could threaten the sector’s success. I’m thinking of the “bill shock” proceeding, in which the FCC is looking at billing practices and various “remedies.” And the failure to settle the D block public safety spectrum issue in a timely manner. And now we have a group of  rural mobile providers who want the FCC to set prices in the data roaming market.

You remember that “roaming” is when service provider A pays provider B for access to B’s network so that A’s customers can get service when they are outside A’s service area, or where it has capacity constraints, or for redundancy. These roaming agreements are numerous and have always been privately negotiated. The system works fine.

But now a group of provider A’s, who may not want to build large amounts of new network capacity to meet rising demand for mobile data, like video, Facebook, Twitter, and app downloads, etc., want the FCC to mandate access to B’s networks at regulated prices. And in this case, the B’s have spent many tens of billions of dollars in spectrum and network equipment to provide fast data services, though even these investments can barely keep up with blazing demand.

The FCC has never regulated mobile phone rates, let alone data rates, let alone data roaming rates. And of course mobile voice and data rates have been dropping like rocks. These few rural providers are asking the FCC to step in where it hasn’t before. They are asking the FCC to impose old-time common carrier regulation in a modern competitive market – one in which the FCC has no authority to impose common carrier rules and prices.

In the chart above, we see U.S. info-tech investment in 2010 approached $500 billion. Communications equipment and structures (like cell phone towers) surpassed $105 billion. The fourth generation of mobile networks is just in its infancy. We will need to invest many tens of billions of dollars each year for the foreseeable future both to drive and accommodate Internet innovation, which spreads productivity enhancements and wealth across every sector in the economy.

It is perhaps not surprising that a small number of service providers who don’t invest as much in high-capacity networks might wish to gain artificially cheap access to the networks of the companies who invest tens of billions of dollars per year in their mobile networks alone. Who doesn’t like lower input prices? Who doesn’t like his competitors to do the heavy lifting and surf in his wake? But the also not surprising result of such a policy could be to reduce the amount that everyone invests in new networks. And this is simply an outcome the technology industry, and the entire country, cannot afford. The FCC itself has said that “broadband is the great infrastructure challenge of the early 21st century.”

Economist Michael Mandel has offered a useful analogy:

new regulations [are] like  tossing small pebbles into a stream. Each pebble by itself would have very little effect on the flow of the stream. But throw in enough small pebbles and you can make a very effective dam.

Why does this happen? The answer is that each pebble by itself is harmless. But each pebble, by diverting the water into an ever-smaller area,  creates a ‘negative externality’ that creates more turbulence and slows the water flow.

Similarly, apparently harmless regulations can create negative externalities that add up over time, by forcing companies to spending  time and energy meeting the new requirements. That reduces business flexibility and hurts innovation and growth.

It may be true that none of the proposed new rules for wireless could alone bring down the sector. But keep piling them up, and you can dangerously slow an important economic juggernaut. Price controls for data roaming are a terrible idea.

Last month, Cisco reported that wireless data traffic is growing faster than projected (up 159% in 2010 versus its estimate of 149%). YouTube illustrated the point with its own report that mobile views of its videos grew 3x last year to over 200 million per day. Tablets like the Apple iPad were part of the upside surprise.

The very success of smartphones, tablets, and all the new mobile form-factors fuels frustration. They are never fast enough. We always want more capacity, less latency, fewer dropped calls, and ubiquitous access. In a real sense, these are good problems to have. They reflect a fast-growing sector delivering huge value to consumers and businesses. Rapid growth, however, necessarily strains various nodes in the infrastructure. At some point, a lack of resources could stunt this upward spiral. And one of the most crucial resources is wireless spectrum.

There is broad support for opening vast swaths of underutilized airwaves — 300 megahertz (MHz) by 2015 and 500 MHz overall — but we first must dispose of one spectrum scuffle known as the “D block.” Several years ago in a previous spectrum auction, the FCC offered up 10 MHz for commercial use — with the proviso that the owner would have to share the spectrum with public safety users (police, fire, emergency) nationwide. This “D block” sat next to an additional 10 MHz known as Public Safety Broadband (PSB), which was granted outright to the public safety community. But the D block auction failed. Potential bidders could not reconcile the technical and business complexities of this “encumbered” spectrum. The FCC received just one D block bid for just $472 million, far below the FCC’s minimum acceptable bid of $1.3 billion. So today, three years after the failed auction and almost a decade after 9/11, we still have not resolved the public safety spectrum question. (more…)

Researchers Martin Hilbert and Priscila Lopez add to the growing literature on the data explosion (what we long ago termed the “exaflood”) with a study of analog and digital information storage, transmission, and computation from 1986 through 2007. They found in 2007 globally we were able to store 290 exabytes, communicate almost 2 zettabytes, and compute around 6.4 exa-instructions per second (EIPS?) on general purpose computers. The numbers have gotten much, much larger since then. Here’s the Science paper (subscription), which appears along side an entire special issue, “Dealing With Data,” and here’s a graphic from the Washington Post:

(Thanks to @AdamThierer for flagging the WashPost article.)

Among other findings in the latest version of Cisco’s always useful Internet traffic updates:

• Mobile data traffic was even higher in 2010 than Cisco had projected in last year’s report. Actual growth was 159% (2.6x) versus projected growth of 149% (2.5x).
• By 2015, we should see one mobile device per capita . . . worldwide. That means around 7.1 billion mobile devices compared to 7.2 billion people.
• Mobile tablets (e.g., iPads) are likely to generate as much data traffic in 2015 as all mobile devices worldwide did in 2010.
• Mobile traffic should grow at an annual compound rate of 92% through 2015. That would mean 26-fold growth between 2010 and 2015.

NetFlix is moving its content delivery platform from Akamai back to Level 3. Level 3 is adding 2.9 terabits per second of new capacity specifically to support NetFlix’s booming movie streaming business.

Here’s a new exaflood metric for you — tweets per second.

From the Twitter blog:

Folks were tweeting 5,000 times a day in 2007. By 2008, that number was 300,000, and by 2009 it had grown to 2.5 million per day. Tweets grew 1,400% last year to 35 million per day. Today, we are seeing 50 million tweets per day—that’s an average of 600 tweets per second. (Yes, we have TPS reports.)

A number of interesting new articles and forums deal with our exaflood theme of the past few years.

“Striving to Map the Shape-Shifting Net” – by John Markoff – The New York Times – March 2, 2010

“Data, data, everywhere” – The Economist – Special Report on Managing Information – February 25, 2010

“Managing the Exaflood” – American Association for the Advancement of Science – February 19, 2010

“Professors Find Ways to Keep Heads Above ‘Exaflood’ of Data” – Wired Campus – The Chronicle of Higher Education – February 24, 2010

Cisco’s latest Visual Networking Index, this one focusing mobile data traffic, projects 108% compound growth through 2014.

I loved pouring through Berkeley’s 2000 and 2003 studies estimating answers to a very big question –- How Much Information? How much digital information do we create and consume. Always lots of useful — and trivial — stuff in those reports. But where has HMI? been these last few years? Finally, UC-San Diego has picked up the torch and run with a new version, HMI? 2009.

So, you are asking, HMI? The UCSD team estimates that in 2008 outside of the workplace Americans consumed 3.6 zettabytes of information. That’s 3.6 x 10^21 bytes, or 3,600 billion billion.

If you’re interested in Net Neutrality regulation and have some time on your hands, watch this good debate at the Web 2.0 conference. The resolution was “A Network Neutrality law is necessary,” and the two opposing sides were:

Against

• James Assey – Executive Vice President, National Cable and Telecommunications Association
• Robert Quinn -  Senior Vice President-Federal Regulatory, AT&T
• Christopher Yoo – Professor of Law and Communication; Director, Center for Technology, Innovation, and Competition, UPenn Law

For

• Tim Wu – Coined the term “Network Neutrality”; Professor of Law, Columbia Law
  
• Brad Burnham – VC, Union Square Ventures
• Nicholas Economides – Professor of Economics, Stern School of Business, New York University.

I think the side opposing the resolution wins, hands down — no contest really — but see for yourself.

YouTube is moving toward a 1080p Hi Def video capability, just as we long-predicted.

This video may be “1080p,” but the frame-rate is slow, and the video motion is thus not very smooth. George Ou estimates the bit-rate at 3.7 Mbps, which is not enough for real full-motion HD. But we’re moving quickly in that direction.

See our brief review of Arbor Networks’ new two-year study where they captured and analyzed 264 exabytes of Internet traffic. Highlights:

• Internet traffic growing at least 45% annually.
• Web video jumped to 52% of all Internet traffic from 42%.
• P2P, although still substantial, dropped more than any other application.
• Google, between 2007 and 2009, jumped from outside the top-ten global ISPs by traffic volume to the number 3 spot.
• Comcast jumped from outside the top-ten to number 6.
• Content delivery networks (CDNs) are now responsible for around 10% of global Internet traffic.
• This fast-changing ecosystem is not amenable to rigid rules imposed from a central authority, as would be the case under “net neutrality” regulation.

See this comprehensive new Web traffic study from Arbor Networks — “the largest study of global Internet traffic since the start of the commercial Internet.” 

Conclusion

 Internet is at an inflection point

 Transition from focus on connectivity to content
– Old global Internet economic models are evolving
– New entrants are reshaping definition / value of connectivity

 New technologies are reshaping definition of network
– “Web” / Desktop Applications, Cloud computing, CDN

 Changes mean significant new commercial, security and engineering challenges

 This is just the beginning…

These conclusions and the data Arbor tracked and reported largely followed our findings, projections, and predictions from two years ago:

• “Estimating the Exaflood – The Impact of Video and Rich Media on the Internet – A ‘zettabyte’ by 2015?”
• “Unleashing the ‘Exaflood’”
• “The Coming Exaflood”

And an update from this spring:

• “Rapid Internet Traffic Growth Continues in U.S. and Around Globe”

Also see our analysis from last winter highlighting the evolution of content delivery networks — what my colleague George Gilder dubbed “storewidth” back in 1999 — and which Arbor now says is the fastest growing source/transmitter of Net traffic.

Cisco better hope wireless “net neutrality” does not happen. It just bought a company called Starent that helps wireless carriers manage the mobile exaflood.

See this partial description of Starent’s top product:

Google, IBM, and other big technology companies don’t think we’re ready for the exaflood.

It is a rare criticism of elite American university students that they do not think big enough. But that is exactly the complaint from some of the largest technology companies and the federal government.

At the heart of this criticism is data. Researchers and workers in fields as diverse as bio-technology, astronomy and computer science will soon find themselves overwhelmed with information. Better telescopes and genome sequencers are as much to blame for this data glut as are faster computers and bigger hard drives. . . .

Two years ago, I.B.M. and Google set out to change the mindset at universities by giving students broad access to some of the largest computers on the planet. The companies then outfitted the computers with software that Internet companies use to tackle their toughest data analysis jobs.

“It sounds like science fiction, but soon enough, you’ll hand a machine a strand of hair, and a DNA sequence will come out the other side,” said Jimmy Lin, an associate professor at the University of Maryland, during a technology conference held here last week.

The big question is whether the person on the other side of that machine will have the wherewithal to do something interesting with an almost limitless supply of genetic information.

At the moment, companies like I.B.M. and Google have their doubts.

For the most part, university students have used rather modest computing systems to support their studies. They are learning to collect and manipulate information on personal computers or what are known as clusters, where computer servers are cabled together to form a larger computer. But even these machines fail to churn through enough data to really challenge and train a young mind meant to ponder the mega-scale problems of tomorrow.

Correction: Exa-scale.

“If they imprint on these small systems, that becomes their frame of reference and what they’re always thinking about,” said Jim Spohrer, a director at I.B.M.’s Almaden Research Center.

YouTube says it now serves up well over a billion videos a day — far more than previously thought.

Holy Swedish silica/on. It’s an exa-prize!

Calling them “Masters of Light,” the Royal Swedish Academy awarded the 2009 Nobel Prize in Physics to Charles Kao, for discoveries central to the development of optical fiber, and to Willard Boyle and George Smith of Bell Labs, for the invention of the charge-coupled device (CCD) digital imager.

Perhaps more than any two discoveries, these technologies are responsible for our current era of dramatically expanding cultural content and commercial opportunities across the Internet. I call this torrent of largely visual data gushing around the Web the “exaflood.” Exa means 10¹⁸, and today monthly Internet traffic in the U.S. tops two exabytes. For all of 2009, global Internet traffic should reach 100 exabytes, equal to the contents of around 5,000,000 Libraries of Congress. By 2015, the U.S. might transmit 1,000 exabytes, the equivalent of two Libraries of Congress every second for the entire year.

Almost all this content is transmitted via fiber optics, where laser light pulsing billions of times a second carries information thousands of miles through astoundingly pure glass (silica). And much of this content is created using CCD imagers, the silicon microchips that turn photons into electrons in your digital cameras, camcorders, mobile phones, and medical devices. The basic science of the breakthroughs involves mastering the delicate but powerful reflective, refractive, and quantum photoelectric properties of both light and one of the world’s simplest and most abundant materials — sand. Also known in different forms as silica and silicon.

The innovations derived from Kao, Boyle, and Smith’s discoveries will continue cascading through global society for decades to come.

See my new Forbes.com commentary on the Microsoft-Yahoo search partnership:

Ballmer appears now to get it. “The more searches, the more you learn,” he says. “Scale drives knowledge, which can turn around and drive innovation and relevance.”

Microsoft decided in 2008 to build 20 new data centers at a cost of $1 billion each. This was a dramatic commitment to the cloud. Conceived by Bill Gates’s successor, Ray Ozzie, the global platform would serve up a new generation of Web-based Office applications dubbed Azure. It would connect video gamers on its Xbox Live network. And it would host Microsoft’s Hotmail and search applications.

The new Bing search engine earned quick acclaim for relevant searches and better-than-Google pre-packaged details about popular health, transportation, location and news items. But with just 8.4% of the market, Microsoft’s $20 billion infrastructure commitment would be massively underutilized. Meanwhile, Yahoo, which still leads in news, sports and finance content, could not remotely afford to build a similar new search infrastructure to compete with Google and Microsoft. Thus, the combination. Yahoo and Microsoft can share Ballmer’s new global infrastructure.

Om Malik surveys the Net traffic spike after Michael Jackson’s death:

Around 6:30 p.m. EST, Akamai’s Net Usage Index for News spiked all the way to 4,247,971 global visitors per minute vs. normal traffic of 2,000,000, a 112 percent gain.

We’ve been talking about Netflix’s sure move to the Web for a long time now. In our presentations, we show how Netflix DVDs that today mostly arrive in the U.S. mail, if sent in high-def (HD) over the Net, would total almost eight exabytes per year. That’s almost half of all U.S. Internet traffic in 2008.

Well, here’s CEO Reed Hastings in Tuesday’s Wall Street Journal:

Netflix Inc. is a standout in the recession. The DVD-rental company added more subscribers than ever during the first three months of the year. Its stock has more than doubled since October.

But Netflix’s chief executive officer, Reed Hastings, thinks his core business is doomed. As soon as four years from now, he predicts, the business that generates most of Netflix’s revenue today will begin to decline, as DVDs delivered by mail steadily lose ground to movies sent straight over the Internet. So Mr. Hastings, who co-founded the company, is quickly trying to shift Netflix’s business — seeking to make more videos available online and cutting deals with electronics makers so consumers can play those movies on television sets.

His position offers a rare look at how a CEO manages a still-hot business as its time runs out. “Almost no companies succeed at what we’re doing,” he says.

Lots of commentators continue to misinterpret the research I and others have done on Internet traffic and its interplay with network infrastructure investment and communications policy.

I think that new video applications require lots more bandwidth — and, equally or even more important, that more bandwidth drives creative new applications. Two sides of the innovation coin. And I think investment friendly policies are necessary both to encourage deployment of new wireline and wireless broadband and also boost innovative new applications and services for consumers and businesses.

But this article, as one of many examples, mis-summarizes my view. It uses scary words like “apocalypse,” “catastrophe,” and, well, “scare mongering,” to describe my optimistic anticipation of an exaflood of Internet innovations coming our way. I don’t think that

the world will simply run out of bandwidth and we’ll all be weeping over our clogged tubes.

Not unless we block the expansion of new network capacity and capability. (more…)

See two recent articles (here and here) addressing a topic I’ve done lots of research on: Internet traffic growth, mostly due to Web video, and the technology investment needed to both drive and accommodate it.

Here’s one of my papers:
Estimating the Exaflood – 01.28.08 – by Bret Swanson & George Gilder

The supposed top finding of a new report commissioned by the British telecom regulator Ofcom is that we won’t need any QoS (quality of service) or traffic management to accommodate next generation video services, which are driving Internet traffic at consistently high annual growth rates of between 50% and 60%. TelecomTV One headlined, “Much ado about nothing: Internet CAN take video strain says UK study.” 

But the content of the Analysys Mason (AM) study, entitled “Delivering High Quality Video Services Online,” does not support either (1) the media headline — “Much ado about nothing,” which implies next generation services and brisk traffic growth don’t require much in the way of new technology or new investment to accommodate them — or (2) its own “finding” that QoS and traffic management aren’t needed to deliver these next generation content and services.

For example, AM acknowledges in one of its five key findings in the Executive Summary: 

innovative business models might be limited by regulation: if the ability to develop and deploy novel approaches was limited by new regulation, this might limit the potential for growth in online video services.

In fact, the very first key finding says:

A delay in the migration to 21CN-based bitstream products may have a negative impact on service providers that use current bitstream products, as growth in consumption of video services could be held back due to the prohibitive costs of backhaul capacity to support them on the legacy core network. We believe that the timely migration to 21CN will be important in enabling significant take-up of online video services at prices that are reasonable for consumers.

So very large investments in new technologies and platforms are needed, and new regulations that discourage this investment could delay crucial innovations on the edge. Sounds like much ado about something, something very big.  (more…)

As nearly every indicator of economic growth plummets, the Net maintains its rise. Given my research on the growth of the Internet, I’m always interested in the latest data. Here are year-end estimates, courtesy of Andrew Odlyzko at the University of Minnesota.

Monthly U.S. traffic by year-end 2008 was about 1.5 exabytes (10^18) per month, for an annual growth rate of around 50-60%. (An exabyte is a million terabytes, or a billion gigabytes.) My research suggests the Net should continue to grow at an annual compound rate of around 56% through 2015.

Take a look at this 40 minute interview with Jen-Hsun Huang, CEO of graphics chip maker Nvidia. It’s a non-technical discussion of a very important topic in the large world of computing and the Internet. Namely, the rise of the GPU — the graphics processing unit.

Almost 40 years ago the CPU — or central processing unit — burst onto the scene and enabled the PC revolution, which was mostly about word processing (text) and simple spreadsheets (number crunching). But today, as Nvidia and AMD’s ATI division add programmability to their graphics chips, the GPU becomes the next generation general purpose processor. (Huang briefly describes the CUDA programmability architecture, which he compares to the x86 architecture of the CPU age.) With its massive parallelism and ability to render the visual applications most important to today’s consumers — games, photos, movies, art, photoshop, YouTube, GoogleEarth, virtual worlds — the GPU rises to match the CPU’s “centrality” in the computing scheme.

Less obvious, the GPU’s attributes also make it useful for all sorts of non-consumer applications like seismic geographic imaging for energy exploration, high-end military systems, and even quantitative finance.

Perhaps the most exciting shift unleashed by the GPU, however, is in cloud computing. At the January 2009 Consumer Electronics Show in Las Vegas, AMD and a small but revolutionary start-up called LightStage/Otoy announced they are building the world’s fastest petaflops supercomputer at LightStage/Otoy’s Burbank, CA, offices. But this isn’t just any supercomputer. It’s based on GPUs, not CPUs. And it’s not just really, really fast. Designed for the Internet age, this “render cloud” will enable real-time photorealistic 3D gaming and virtual worlds across the Web. It will compress the power of the most advanced motion picture CGI (computer generated imaging) techniques, which can consume hours to render one movie frame and months to produce movie sequences, into real-time . . . and link this power to the wider world over the Net. 

Watch this space. The GPU story is big.

The venerable Economist magazine has made a hash of my research on the growth of the Internet, which examines the rich media technologies now flooding onto the Web and projects Internet traffic over the coming decade. This “exaflood” of new applications and services represents a bounty of new entertainment, education, and business applications that can drive productivity and economic growth across all our industries and the world economy. 

But somehow, The Economist was convinced that my research represents some “gloomy prophesy,” that I am “doom-mongering” about an Internet “overload” that could “crash” the Internet. Where does The Economist find any evidence for these silly charges?

In a series of reports, articles (here and here), and presentations around the globe — and in a long, detailed, nuanced, very pleasant interview with The Economist, in which I thought the reporter grasped the key points — I have consistently said the exaflood is an opportunity, an embarrassment of riches.

I’ve also said it will take a lot of investment in networks (both wired and wireless), data centers, and other cloud infrastructure to both drive and accommodate this exaflood. Some have questioned this rather mundane statement, but for the life of me I can’t figure out why they deny building this amazingly powerful global Internet might cost a good bit of money.

One critic of mine has said he thinks we might need to spend $5-10 billion on new Net infrastructure over the next five years. What? We already spend some $70 billion a year on all communications infrastructure in the U.S. with an ever greater portion of that going toward what we might consider the Net. Google invests more than $3 billion a year in its cloud infrastructure, Verizon is building a $25-billion fiber-to-the-home network, and AT&T is investing another $10 billion, just for starters. Over the last 10 years, the cable TV companies invested some $120 billion. And Microsoft just yesterday said its new cloud computing infrastructure will consist of 20 new “super data centers,” at $1 billion a piece.

I’m glad The Economist quoted my line that “today’s networks are not remotely prepared to handle this exaflood.” Which is absolutely, unambiguously, uncontroversially true. Can you get all the HD video you want over your broadband connection today? Do all your remote applications work as fast as you’d like? Is your mobile phone and Wi-Fi access as widespread and flawless as you’d like? Do videos or applications always work instantly, without ever a hint of buffer or delay? Are today’s metro switches prepared for a jump from voice-over-IP to widespread high-resolution video conferencing? No, not even close.

But as we add capacity and robustness to many of these access networks, usage and traffic will surge, and the bottlenecks will shift to other parts of the Net. Core, edge, metro, access, data center — the architecture of the Net is ever-changing, with technologies and upgrades and investment happening in different spots at varying pace. This is not a debate about whether the Internet will “crash.” It’s a discussion about how the Net will evolve and grow, about what its capabilities and architecture will be, and about how much it will cost and how we will govern it, but mostly about how much it will yield in new innovation and economic growth.

The Economist and the myriad bloggers, who everyday try to kill some phantom catastrophe theory I do not recognize, are engaging in the old and very tedious practice of setting up digital straw men, which they then heroically strike down with a bold punch of the delete button. Ignoring the real issues and the real debate doesn’t take much effort, nor much thought.

Microsoft, having a couple weeks ago finally capitulated to the Web with the announcement of Ray Ozzie’s new Net-based strategy, now says it will build 20 new data centers at $1 billion a piece. Google is already investing some $3 billion a year on its cloud infrastructure.

Lots of people have criticized my rough estimates of a couple hundred billion in new Net investment over the next five years, saying it’s closer to $5-10 billion, and I wonder what the heck they are thinking.

I’ve written a lot about what comes after high-definition (HD) video. New concepts like Ultra-HD from Japanese company NHK and IMAX-at-Home from Hewlett-Packard could be real by the middle of next decade. But that great TV innovator the National Football League is already ahead of the game.

Next week, a game between the San Diego Chargers and the Oakland Raiders will be broadcast live in 3-D to theaters in Los Angeles, New York and Boston. It is a preliminary step on what is likely a long road to any regular 3-D broadcasts of football games.

For someone like me who studies cloud computing and Internet traffic, which is measured in tera-, peta-, and exabytes, Google’s terabyte sorting record is interesting:

we were able to sort 1TB (stored on the Google File System as 10 billion 100-byte records in uncompressed text files) on 1,000 computers in 68 seconds. By comparison, the previous 1TB sorting record is 209 seconds on 910 computers.

But I suppose I can see how you might not feel the same way.

In the context of potential federal media regulation known as “à la carte,” my colleague Adam Thierer comments on new Internet video technologies and content here and here, and expertly reiterates an old theme of mine, namely that the Internet *is* à la carte.