One Data Center To Rule Them All

You may not immediately recognize the name Weta Digital. But you almost certainly know its work. Weta is the New Zealand special effects shop that created the computer artistry for the “Lord of the Rings” trilogy and the 2005 version of “King Kong.” The company was co-founded by Peter Jackson, the Academy Award-winning director of the LOTR series.

That kind of digital imagery requires a lot of computing power. Weta recently announced the completion of a new “extreme density” data center featuring HP’s new 2-in-1 server blades, which combines two server in a single energy-efficient blade. Weta is running four computing clusters, each equipped with 156 of HP’s Proliant BL2×220c server blades, which hold spots 219 through 222 on the current Top 500 list of the world’s fastest supercomputers.

Strong Traffic Growth Between US, Latin America

Traffic growth between the US and Latin America grew 112 percent between mid-2007 and mid-2008, far exceeding the growth rate seen in other global markets, according to new data from the telecom research firm TeleGeography. Total international Internet traffic grew 53 percent during the same period, compared to 61 percent growth the previous year.

That growth may explain why Google is planning a data center in Miami, a key connectivity gateway to Latin American markets. That project is part of a broader focus on international expansion by the search giant, which is also investing in undersea fiber capacity and scouting data center sites in Asia.   

Internet Traffic: Growing or Slowing?

“In spite of the widespread claims of continuing and even accelerating growth rates, Internet traffic growth appears to be decelerating.” That’s the verdict from Andrew Odlyzko of the University of Minnesota, a specialist in Internet metrics who monitors more than 100 public sources of web traffic data for the university’s MINTS project.

In his mid-year 2008 analysis, Odlyzko notes that estimates of Internet traffic growth are all over the map (even within Cisco, where company white papers describe slower growth rates than executives speeches). Citing that disparity, and the history of problematic growth projections (i.e. “the Internet is doubling every three months”), the MINTS project has focused on aggregating actual data that is available to the public. While many networks keep their figures private, Odlyzko says that MINTS data reflects “a substantial fraction of the world’s Internet traffic.”

The ‘Tiger Effect’ Slows Some Networks

The volume of Flash media traffic on major networks spiked sharply on Monday afternoon, according to Arbor Networks, prompting some ISPs to wonder whether they were under some new type of DDoS attack. “For several ISPs, traffic into their network grew by 15-25%,” noted Craig Labovitz of Arbor, which aggregates traffic data from 70 ISPs around the world through its Internet Traffic Observatory. “In one provider, inbound traffic nearly doubled.”

It turns out that Tiger Woods is to blame. Both NBC and ESPN provided live Internet video of the U.S. Open playoff between Tiger Woods and Rocco Mediate at Torrey Pines. Arbor’s analysis found that the spikes in Flash traffic correlated closely with key moments in the Tiger-Rocco duel, peaking when Woods prevailed on the 19th playoff hole. Not surprisingly, the largest increases in traffic were seen out of Akamai and Limelight content delivery networks and their upstream providers.

As most golf fans know by now, Woods said Wednesday that he will need surgery to repair the anterior cruciate ligament (ACL) in his left knee, along with the fact that he played the Open with two stress fractures of his left tibia.

Cogent Slashes Bandwidth Prices

Cogent Communications (CCOI) has slashed its already low prices for Internet bandwidth, hoping that lower pricing will accelerate the shift of video programming from cable TV to the Internet. Cogent says it expects the new pricing will help gain market share from its rivals, primarily Level 3 (LVLT) and Global Crossing.

Cogent bandwidth is available in 325 data centers, which represent half of the company’s business. Its basic rate of $10 a megabit is well below its competitors, and the company has begun offering even deeper discounts for customers with multi-year, high-volume contracts. Last month Cogent lowered its base rate for a three-year contract to $7, with rates as low as $4 per megabit for customers who commit to a 10-gigabit Ethernet connection. To protect itself, Cogent has stipulated that existing customers only get the lower rate if it results in a larger monthly spend with Cogent - meaning they will probably need to buy more capacity.

“In order to accelerate the adoption of these business models, we felt more aggressive pricing for large volume applications made a lot of sense,” said Cogent CEO Dave Schaeffer. “We’re in an environment where Internet traffic growth is slowing, and while we believe this is temporary, we want to stimulate Internet growth.”

‘Growth Is Slowing, Hype Is Accelerating’

In a post titled “Internet Traffic Growth Doesn’t Matter,” Andrew Schmitt from Nyquist Capital raises some tough questions about popular assumptions for network traffic, particularly from Internet video. Andrew is recapping the Gilder TeleCosm conference, and in particular a presentation by Andrew Odlyzko from the University of Minnesota.

Odlyzko will be familiar to many readers with memories of the dot-com boom and bust, as he was among the first to challenge the oft-repeated contention that Internet traffic was “doubling every three months.” In his presentation at TeleCosm, Odlyzko observed that “Internet traffic growth rates are slowing. Hype is accelerating.”

Some of the hype is intertwined with the network neutrality debate and the assertion by some analysts and providers that Internet capacity will be strained by the robust growth of online video and large-file data transfer. Odlyzko’s Minnesota Internet Traffic Studies (MINTS), which aggregates traffic data from a number of sources, estimates overall Internet growth rate at 50 to 60 percent per year. His presentation suggests a mixed picture - there are huge potential bandwidth drivers on the horizon, but Internet traffic is actually slowing in several high-bandwidth markets.

11.5 Billion Video Streams in March

More than 11.5 billion videos were streamed in the U.S. in March, according to a new data from ComScore (via Contentinople). That’s a 13 percent increase from February, and up 64 percent from one year ago. The average online viewer clocked in 235 minutes of video, or about four hours. See the ComScore web site for additional details.

The data center business is doing its part to contribute to the growth of online video, as can be seen at our DCK video archive, the Data Center Videos channel on YouTube, and also at Data Center Journal’s new DataCenter.tv.

$461 Million for Online Video Startups in 2007

Venture capitalists continued to pour money into online video startups in 2007, even as they were scaling back their investments in most other sectors. NewTeeVee reports that $460.5 million was invested in 68 video startups in 2007, up from $266.9 million in 2006. The pace of VC investment accelerated in the first quarter of 2008, with another $217.3 million going to 29 video startups, which projects to $868 million for the full year. That bucks the broader trend, as overall venture capital investments in 1Q 2008 declined 9 percent from previous quarter and 8 percent from the year-earlier period.

What does this mean for the data center sector? These video startups need infrastructure for hosting, peering and content delivery, and the VC investment provides these companies with capital to invest. The trend certainly bodes well for the CDN sector, and will probably helps sales of 10 Gig Ethernet ports at Equinix (EQIX) and other peering hubs. The downside? Not all of these companies will survive.