The bandwidth explosion is officially here. We are rapidly approaching the day where the standard for all businesses’ internet connectivity needs is a 100M synchronous connection. We are seeing a huge increase in requests for metro Ethernet internet circuits and this is what we’re finding – prices are plummeting. Just a year ago, we were ranting and raving when we saw 100M fiber Ethernet internet circuits priced at $1,712/month. We are now seeing pricing for 250M internet circuits in the $2,000 to $2,200 range in certain areas.
So why are these prices plummeting? I have a few thoughts on this –
1. Cable companies. Comcast, Charter, Time Warner Cable, and the like are rapidly building out their fiber presences throughout the country. It used to be that only your traditional telephone companies(think AT&T, Centurylink, Verizon, etc) competed for high end fiber business. This kept their cost structure fairly high as they were all competing primarily using Local Exchange Carrier(LEC) fiber. The market’s pricing was fairly insulated as no true threats existed. This is not the case anymore. Cable companies saw an opportunity and presented a disruptive pricing structure that has shaken up the industry. We specifically like how scalable these solutions are as incremental bandwidth is priced at ultra-competitive levels. This has forced the traditional telephone networks to adjust their pricing to keep up.
2. Backbone increases. Cisco, Juniper, and other providers of high end backbone optical equipment continue to wage war on each other in the ongoing battle to increase the speed the bandwidth that can be pushed through a piece of fiber. As that increases, the amount of capacity that can be deployed to customers increases. Old fiber network maps used to show spiderwebs of OC12s and OC48s. Those days are gone and have been replaced by 10G, 100G, and even higher bandwidth circuits.
3. Availability of access methods. Although we are huge proponents of fiber based services, we see Ethernet over copper, and carrier grade wireless services(not 3G and 4G, but rather fixed wireless services backed with service level agreements, like http://www.123.net/product/data/wireless/ filling in the gaps where fiber is either unavailable or is too expensive to build. Even the price of bonded T1s has dropped to levels that make it competitive in certain situations.
So what is the impact of the implosion of bandwidth pricing/broader availability of large symmetric broadband services? The first is the willingness of companies to move more applications out to the cloud, like disaster recovery Why should a company build a second big data center if they can replicate data to the cloud using a 100M or 1G internet connection? Hosted/cloud CRM and ERP are other examples of applications that are looking even more and more attractive as big bandwidth becomes widely available.
If your organization finds itself needing big internet circuits, MPLS/VLPS, or metro optical Ethernet, look to us(www.go-c3.com) as your source. Without bias, we represent the top 85+ carriers and we can help guide you through the process of qualifying solutions minus the marketing hype and heavy handed sales pitches. Otherwise, you can go talk to sales people and hear sales pitches. It’s your call.