Global Cloud Index: Traffic to Grow Sixfold by 2016

In the second annual Cisco Global Cloud Index (2011-2016), Cisco forecasts global data center traffic to grow fourfold and reach a total of 6.6 zettabytes annually by 2016. The company also predicts global cloud traffic, the fastest-growing component of data center traffic, to grow sixfold – a 44 percent combined annual growth rate (CAGR) – from 683 exabytes of annual traffic in 2011 to 4.3 zettabytes by 2016.

For context, 6.6 zettabytes is equivalent to:

• 92 trillion hours of streaming music – Equivalent to about 1.5 years of continuous music streaming for the world's population in 2016.
• 16 trillion hours of business Web conferencing – Equivalent to about 12 hours of daily Web conferencing for the world's workforce in 2016.
• 7 trillion hours of online high-definition (HD) video streaming – Equivalent to about 2.5 hours of daily streamed HD video for the world's population in 2016.

The vast majority of the data center traffic is not caused by end users but by data centers and cloud-computing workloads used in activities that are virtually invisible to individuals.

For the period 2011-2016, Cisco forecasts that roughly 76 percent of data center traffic will stay within the data center and will be largely generated by storage, production and development data. An additional 7 percent of data center traffic will be generated between data centers, primarily driven by data replication and software/system updates.

The remaining 17 percent of data center traffic will be fueled by end users accessing clouds for Web surfing, emailing and video streaming.

From a regional perspective, the Cisco Global Cloud Index predicts that through 2016, the Middle East and Africa will have the highest cloud traffic growth rate, while the Asia Pacific region will process the most cloud workloads, followed by North America.

Overview of the Latest Worldwide Market Study:

• The Cisco Global Cloud Index (2011-2016) was developed to estimate global data center and cloud-based Internet Protocol (IP) traffic growth and trends. The Cisco Global Cloud Index serves as a complementary resource to existing network traffic studies, providing new insights and visibility into emerging trends affecting data centers and cloud architectures. The forecast becomes increasingly important as networks and data centers become more intrinsically linked in offering cloud services.
• The Cisco Global Cloud Index includes a "workload transition" forecast, which shows the workload shifting from traditional data centers to more virtualized cloud servers.
• The forecast also includes a supplement on Cloud Readiness Regional Details, which examines the fixed and mobile network abilities of each global region (from nearly 150 countries) to support business and consumer cloud-computing applications and services.
• The Cisco Global Cloud Index is generated by modeling and analysis of various primary and secondary sources, including 40 terabytes of traffic data sampled from a variety of global data centers over the past year; results from more than 90 million network tests over the past two years; and third-party market research reports. 

"As cloud traffic continues to proliferate in a new world of many clouds, the Cisco Global Cloud Index provides all cloud computing stakeholders with a very valuable barometer to make strategic, long-term planning decisions. This year's forecast confirms that strong growth in data center usage and cloud traffic are global trends, driven by our growing desire to access personal and business content anywhere, on any device. When you couple this growth with projected increases in connected devices and objects, the next-generation Internet will be an essential component to enabling much greater data center virtualization and a new world of interconnected clouds," said Doug Merritt, senior vice president, Corporate Marketing, Cisco Systems.

Western European Private Cloud Infrastructure Growth

The detractors of cloud computing benefits will state that the typical adoption is still limited at most enterprises -- they're deploying cloud services to a few early-adopters. That being said, some leading markets are confidently moving ahead with mainstream deployments, regardless of the caution. While others, such as western Europe, are apparently in transition.

The western European private cloud market will grow at a CAGR of 23.2 percent for the next five years to reach $7.9 billion in 2016, according to the latest market study by International Data Corporation (IDC).

IDC has been looking in-depth at the private cloud marketplace -- from a hardware, software, services and networking points of view.

"The growth of private cloud is even more impressive in the context of the current economic situation," said Mette Ahorlu, research director, IDC European Services.

According to IDC's assessment, demand in the region is being driven by the need for cost savings and efficiency and with a longer perspective of creating increased flexibility, and is across the board -- from hardware, to software, to management, networking and services.

Creating a private cloud has an impact on all aspects of IT infrastructure.

Key findings from the market study include:

• Most enterprises are still in early phases of cloud adoption, typically testing out cloud and perhaps rolling out one or a few cloud services to the full range of relevant users, but not deploying cloud on a really large scale.
• There is growing interest in pre-packaged private clouds, pre-configured with servers, storage, network and management that speed up implementation and reduce need for services.
• The cloud computing approach is to become a critical part of the IT strategy for the majority of EMEA organizations in the next two to three years.
• While security, compliance and data location are barriers to public cloud they become drivers for the adoption of the private cloud.
• Partnering between technology companies and service companies is important to help create transparency in a complex market where clients think there are too many moving parts.
• Hosted private cloud is not nearly as popular as clouds on customers' premises, but hosted private cloud will grow even faster and revenue will exceed on-premises clouds by 2016.
• While the market is serviced by traditional IT providers and outsourcing companies, telecom service providers have also seen it as a great opportunity to expand their businesses.

IDC believes that managed cloud services is fundamentally a network-based offering. It's becoming an established commodity, scales to a mass market customer base, and builds on the kind of support or billing relationships that telecom service providers are capable of offering.

Cloud Service Usage Now Mainstream in UK and Ireland

The increased uptake in cloud service adoption is truly a worldwide phenomenon. New research published by Cisco Systems demonstrates the dramatic shift in attitudes towards cloud services in the UK and Ireland.

The report -- entitled "Cisco CloudWatch 2012" -- is the second in Cisco's annual Cloud series and finds IT decision makers in a bullish mood, increasingly placing applications and services from across their business into the cloud and planning for further investment over the coming 12 months.

Furthermore, the message that cloud services can deliver significant cost reduction is now resonating within the IT community -- cost saving has become a top driver for adopting cloud applications.

Granted, security remains the number one concern when migrating services and applications to the cloud. But that concern is noticeably less pronounced than in last year's report.

The use of public cloud is up 11 percent, although private cloud still dominates.

Key findings of the market study include:

• IT decision makers say that cloud is now on their agenda -- a resounding 90 percent up from just 52 percent in 2011.
• Of this number, 31 percent consider cloud as being critical and underpinning much of the organizations' activity (this was just 7 percent in 2011).
• Of those organizations where cloud is on the agenda, 85 percent are planning further investment in the next twelve months.
• In CloudWatch 2011, reducing cost ranked fifth in a list of most important things when considering cloud -- in today's report it ranks as the number one priority.
• 20 percent reduction in concerns over security (52 percent in 2012 compared to 72 percent in 2011).
• 54 percent of respondents currently use private cloud (up from 34 percent in 2011) and public cloud usage is up from 18 percent in 2011 to 29 percent in 2012

Cisco commissioned independent research amongst IT decision makers across a broad range of vertical sectors including retail, finance, healthcare, public sector and service provider.

The results clearly show that cloud has moved from hype to reality, with cloud now seen as a mainstream element of IT strategy.

"This new report validates a shift that many of us in the IT industry have been witnessing first hand over the last 6-12 months. Cloud usage has now gone mainstream. After several years of ‘hype' across the IT industry, it now seems that cloud is maturing and organizations across a broad range of sectors are realizing the benefits of moving to a cloud model, said Ian Foddering, Chief Technology Officer and Technical Director, Cisco UK and Ireland.

Foddering continues, "Against this backdrop it's encouraging to see progressive companies realize the potential of cloud to revolutionize their respective industries. All these signs point towards a well-established market where the previously blurred boundaries of cloud computing are clearing. IT decision makers now more educated about the distinctions between cloud and managed services and more willing to invest."

How CIOs Migrate their IT Applications to the Cloud

As the role of cloud computing is growing around the globe, many CIOs and other senior IT decision makers are facing challenges with their existing network infrastructure -- to support the migration of their business applications to the cloud. A new international study by Cisco Systems revealed the ongoing challenges associated with public or private cloud deployments.

These latest research findings provide insight into the current state of cloud service adoption and the chasm between IT expectations and network realities. The survey also examines the experiences of IT professionals regarding the level of difficulty and time required to update their networks and migrate their applications to the cloud.

The 2012 Cisco Global Cloud Networking Survey addresses the applications that are most critical for businesses to move to a cloud services delivery model, as well as the network challenges and potential disruptions and road blocks they are facing during this process. The report also takes a closer look at the typical length of these cloud migrations, and how confident IT professionals are in the ability of their own network deployments to securely deliver an optimal cloud application experience.

Among its findings, the study reveals that updating the network is one of the top focus areas for cloud migration. In order to successfully move more applications to the cloud, the majority of respondents cited a cloud-ready network (37 percent) as the biggest infrastructure element required for further cloud deployments, ahead of a virtualized data center (28 percent) or a service-level agreement from a managed cloud service provider (21 percent).

This data expands on the Cisco Global Cloud Index, which predicts that more than 50 percent of computing workloads in data centers will be cloud-based by 2014, and that global cloud traffic will grow over 12 times by 2015, to 1.6 zettabytes per year – the equivalent of over four days of business-class video for every person on Earth.

Key findings from the global market study include:

Cloud Deployments in Perspective

• Almost two in five (39 percent) of those surveyed said they dread network challenges associated with private or public cloud deployments so much that they would rather get a root canal, dig a ditch, or do their own taxes.
• At the same time, nearly three quarters (73 percent) feel they are confident with enough information to begin their private or public cloud deployments. However, the remainder (27 percent) feels they have more knowledge about how to play @ngry Birds than the steps needed to migrate their company's network and applications to the cloud.
• In a clear sign that many IT organizations are still considering and planning cloud migrations, nearly one quarter (24 percent) of IT decision makers said that over the next six months, they are more likely to see a UFO, a unicorn or a ghost before they see their company's cloud migration starting and finishing.
• Without proper processes and planning, more than one quarter (31 percent) said they could train for a marathon in a shorter period of time than it would take to migrate their company's applications to the cloud.
• A majority (76 percent) predict their cloud applications are likely to be breached, yet only one quarter (24 percent) are confident to the point in which they believe the odds are better for them to be struck by lightning than have their cloud applications breached by an unwanted third party.

Cloud Deployments Expected to Increase Significantly by the end of 2012

• Presently, only 5 percent of IT decision makers have been able to migrate at least half of their total applications to the cloud. By the end of 2012, that number is expected to significantly rise, as one in five (20 percent) will have deployed over half of their total applications to the cloud.

Most Critical Infrastructure for Cloud Deployments

• In order to successfully move more applications to the cloud, the majority of respondents cited a cloud-ready network (37 percent) as the biggest infrastructure element required for further cloud deployments, ahead of a virtualized data center (28 percent) or a service-level agreement from a cloud service provider (21 percent).

Top Infrastructure Roadblocks to Cloud Migration

• During the cloud migration process, data protection security (72 percent) was cited as the top network challenge or roadblock responsible for preventing a successful implementation of cloud services, followed by availability/reliability of cloud applications (67 percent), device-based security (66 percent), visibility and control of applications across the WAN (60 percent) and overall application performance (60 percent).

Top Choice of Application for Cloud Migration

• If given the choice of only being able to move one application to the cloud, most respondents would choose storage (25 percent), followed by enterprise resource planning (ERP) applications to manage HR, customer relationship management, supply chain management, and project management systems (20 percent). Email (16 percent) and collaboration solutions (15 percent) followed.

Reality Check: Status of Cloud Application Migration

• When asked which applications have been moved, or are being planning to be moved to public or private clouds in the next year, the majority of IT decision makers cited email and Web services (77 percent), followed by storage (74 percent) and collaboration solutions such as Web conferencing and instant messaging (72 percent).

Global Cloud Index: the Evolution of Data Center Traffic

As 2011 comes to a close, many busy executives and IT managers will be pondering the continued adoption of cloud applications within their organizations. How can a business be adequately prepared for the anticipated increase in demand for managed cloud services? Moreover, what are the key related market indicators that are shaping the future of emerging business technology deployments?

The Cisco Global Cloud Index is an ongoing effort to forecast the growth of global data center and cloud-based IP traffic. The forecast includes trends associated with data center virtualization and cloud computing.

From 2000 to 2008, peer-to-peer file sharing dominated Internet traffic. As a result, the majority of Internet traffic did not touch a data center, but was communicated directly between Internet users. Since 2008, most Internet traffic has originated or terminated in a data center.

Data center traffic will continue to dominate Internet traffic for the foreseeable future, but the nature of data center traffic will undergo a fundamental transformation brought about by cloud applications, services, and infrastructure.

By 2015, one-third of data center traffic will be cloud traffic.

Global Data Center IP Traffic: Already in the Zettabyte Era

The Internet may not reach the zettabyte era until 2015, but the data center has already entered the zettabyte era. While the amount of traffic crossing the Internet and IP WAN networks is projected to reach nearly 1 zettabyte per year in 2015, the amount of data center traffic is already over 1 zettabyte per year -- and by 2015 will quadruple to reach 4.8 zettabytes per year.

This represents a 33 percent CAGR. The higher volume of data center traffic is due to the inclusion of traffic inside the data center (Typically, definitions of Internet and WAN stop at the boundary of the data center).

The global data center traffic forecast, a major component of the Global Cloud Index, covers network data centers worldwide operated by service providers as well as private enterprises.

Traffic Destinations: Most Traffic Stays Within the Data Center

In 2010, 77 percent of traffic remains within the data center, and this will decline only slightly to 76 percent by 2015. The fact that the majority of traffic remains within the data center can be attributed to several factors:

• Functional separation of application servers and storage, which requires all replication and backup traffic to traverse the data center.
• Functional separation of database and application servers, such that traffic is generated whenever an application reads from or writes to a central database.
• Parallel processing, which divides tasks into multiple smaller tasks and sends them to multiple servers, contributing to internal data center traffic.

The ratio of traffic exiting the data center to traffic remaining within the data center might be expected to increase over time, because video files are bandwidth-heavy and do not require database or processing traffic commensurate with their file size.

However, the ongoing virtualization of data centers offsets this trend. Virtualization of storage, for example, increases traffic within the data center because virtualized storage is no longer local to a rack or server.

How does the transition of workloads from traditional data centers to cloud data centers effect the typical IT environment? Find the answer to this question, and learn more about the implications, by browsing the Cisco Global Cloud Index forecast data.