Winning the Internet capacity challenge
Europe is perfectly placed to host the tech start-up boom
By Industry Insight | Published: 13:30, 03 May 2013
Let’s take a moment to remember how many events took place in 2012. The first global spectacle came as the British Commonwealth celebrated the Queen’s Diamond Jubilee with style. Next we saw the usual hope and heartbreak of the UEFA Euro 2012 football tournament in Poland and Ukraine. The jewel in the crown of 2012 was of course the Olympic and Paralympic Games. Danny Boyle’s Opening Ceremony captured the attention of the world and the International Olympic Committee estimated that 900 million people watched it on TV.
But London 2012 was also notable for being the most ‘connected’ Olympic Games ever. For example, on Facebook star athletes saw huge increases in their popularity, with British heroes Jessica Ennis and Tom Daley seeing increases of over 630% in the number of ‘likes’ their fanpages each had. And BBC iPlayer streaming activity spiked by 30% during Usain Bolt’s 100m final win.
These figures demonstrate the high demand placed on Internet-related services, from simple news through to bandwidth-intensive activities like streaming live video. These events created a number of challenges for Internet Exchange Points (IXPs) and data centres to overcome in preparation for the increased traffic to Europe, and these organisations fortified their infrastructure and hardware to stay ahead of demand. For example, LINX - the London Internet Exchange Point that allows different networks to interconnect, upgraded its second local area network (LAN) in preparation for the games (as reported by Techworld last year).
But 2013 in Europe is relatively quiet in terms of large-scale international events. So what happened to all of the measures taken for 2012? And what is continuing the momentum for Internet capacity growth? Following turbulent times, the global economy has been turning to technology start-ups to generate jobs and revenue, and there is support at Government level in many countries for entrepreneurs across the world.
For example, a report by Google and PriceWaterhouseCooper estimates that by 2033 tech start-ups will contribute up to $109 billion to Australia’s GDP. In Europe we’re seeing similar activity with start-ups growing rapidly, contributing financially, creating jobs, and requiring more Internet capacity. There is also significant support at an international level, with initiatives such as the European Union’s Leaders Club aiming to galvanise more entrepreneurs into the tech space.
At a more regional level, the UK has London’s Silicon Roundabout and various other tech hubs and accelerators, Helsinki has the Start-up Sauna, Amsterdam has a variety of initiatives such as Startupbootcamp, and Berlin has a fast growing reputation as a major tech start-up hub. All these locations have IXPs and data centres which are constantly expanding the Internet capacity by adding ports and hardware to connect to the bandwidth to keep ahead of demand.
In the Netherlands, the Amsterdam Internet Exchange Point (AMS-IX) experiences around 30-40% growth in Internet capacity each summer, primarily due to the number of sporting events taking place simultaneously, such as the Tour de France, football championships or tennis. But the increased capacity does not simply go unused during the rest of the year - it’s actually quickly absorbed in a number of ways, including through business growth. In fact, the trend in Amsterdam has seen AMS-IX regularly grow its Internet capacity by at least 30% per year in recent times. Cara Mascini CMO of AMS-IX noted that while it’s a chicken and egg scenario when it comes to Internet capacity - start-ups which require capacity or capacity which attracts start-ups - there is definitely a connection between the two.
Despite only recently being established, London’s Silicon Roundabout has seen some early success, in part because the location has been well thought out; it’s highly connected in terms of infrastructure and transport and it’s placed within a country where there are few barriers for businesses to thrive. As a financial centre, London relies on ultra-fast transaction speeds that can only be supported by highly-connected infrastructure. In addition to being a creative and thought-sharing hub, it’s essential that the Silicon Roundabout or any start-up hub can support potential growth for start-ups. For example, if the Silicon Roundabout was built in an area where Internet capacity was saturated and additional infrastructure was difficult to implement it would not make a suitably nurturing business environment.
Start-ups usually connect via an ISP first, but once they achieve significant scale they are likely to connect with an IXP -because it will improve efficiency, latency and the overall service for the start-up and its customers. It’s difficult to predict when start-ups will go viral and attract millions of users, which means IXPs must constantly be ahead of the curve to avoid bottlenecks of traffic. And just the sheer volume of new start-ups has a knock-on effect on Internet capacity as hundreds of new start-ups connect through ISPs - a fact that data centres and IXPs cannot ignore. Both are ensuring they are easily accessible in these new start-up rich areas, with data centre provider TelecityGroup, for example, acquiring data centre locations in Helsinki’s start-up hub late last year.
Berlin is becoming another hotbed for start-ups, and Chancellor Angela Merkel has repeatedly shown support for the technology industry at a domestic and international level. Mrs Merkel opened CEBIT (one of the world’s biggest computer expos in the world) giving a keynote address about how start-ups can contribute to the economy across all of Europe, and toured the Berlin start-up scene visiting companies like Wooga and ResearchGate. This highlights that the relationship between the IT industry, economy and infrastructure is closely entwined to the start-up scene.
Given the level of support for tech start-ups, it’s easy to see how IXPs across Europe actually never experience any ‘surplus’ or ‘spare’ capacity, instead there is a constantly growing demand as end users voraciously devour new services. Mrs Merkel’s vision of a digital economy underlines how Europe is in a position to lead the world with digital innovation, and makes it clear that Internet capacity will be of critical importance in the future. We consider YouTube and Facebook to be established giants of the online world, but we must remember that they started small too, and the next big thing could take-off at any moment. Europe is perfectly placed to host the tech start-up boom, and when it happens, it certainly won’t be artificially constrained by issues such as Internet capacity.
Axel Pawlik is managing director of the RIPE NCC