2020 – The Year of “You’re on Mute!”– but the Packets Kept Flowing

With 2020 almost under our belt, I wanted to share my perspective on some of the IP interconnection developments we’ve seen around the globe in the past year, as well as some plans we have at Leaseweb for 2021.

Growth? Explosion!

With the almost overnight switch to home working back in March, all players in the internet supply chain reported huge growth in both users and bandwidth. The leading Dutch fixed access networks (KPN and Ziggo/Liberty Global) reported 20-25% growth during the first (“intelligent”) lockdown with another 10-15% growth during the current lockdown. This was driven not only by downstream video services (e.g. Netflix) but also by symmetrical services such as videoconferencing. Internet Exchanges like AMS-IX, DE-CIX, and LINX saw about 25% traffic growth (all smoothly handled). At Leaseweb we saw our total bandwidth grow by 31%, reflecting the increased usage of the games, videos, and applications of our end users.

I believe some of the most impressive growth was achieved by Zoom (from 10 million meeting participants per day in December 2019 to 200 million in April 2020) and Microsoft (daily Teams users grew from 32 million at the start of March to 115 million in early December 2020). I can only imagine the work in the background to build all that extra infrastructure, activate additional 100G waves around the planet, grow interconnection capacity and so on – all while equipment supply chains and human mobility were sincerely challenged. Respect for the infrastructure and network engineering teams that have enabled this growth without too many noticeable hick-ups.

Lag in Your Games or Low-Resolution Videos? Call Your Isp, Don’t Blame the Game or Video.

In 2020, we saw ongoing consolidation and market domination in both access networks (in most countries, 2 or 3 fixed and mobile networks together serve >85% of the market) and content markets (>85% of internet traffic is pulled from less than 8 content providers – think of Netflix, Google/YouTube, and Facebook). Over the years this has resulted in some large access networks trying to monetize access to their internet users by forcing other parties to pay for interconnection, either through paid peering (sometimes at outrageous prices, with Deutsche Telekom as the most infamous example in Europe) or by only offering access through a (paid) internet exchange that they own (like KPN).

Large and “visible” content providers (like the ones mentioned) are in a position to negotiate favorable terms (no ISP wants to be in the news with their customers complaining that “their Netflix quality sucks”), while content hosted with neutral hosting providers (like Leaseweb) is more likely to face higher costs (for those that pay the price for direct interconnection) or worse quality (for those that try to handle the traffic through their Tier 1 IP Transit providers). Regulators and consumer protection organizations continue to struggle with the impact that this has on digital innovation and a level playing field.

Outside Europe, the situation is sometimes even worse, with the major Chinese access networks increasingly deploying global backbones and playing the same game (at an even higher price to serve their end customers). At Leaseweb, we have the connectivity and contacts to achieve the right balance between performance and costs to serve the content pulled by internet users of those access networks. For those content providers who are suffering but able to educate and mobilize their end-user customers: a large volume of customer complaints and media publicity typically have more impact on the interconnection policy of an ISP (Internet Service Provider) than other options.

Infrastructure and Interconnection – Don’t Put All Your Eggs in One Basket.

Enterprise customers increasingly deployed a hybrid cloud approach in 2020, with a mix of public (internet) and private connectivity enabled by SD-WAN technology to find the right mix between performance and cost. This not only drove growth for SD-WAN technology vendors (e.g., Cisco/Viptela) and SDN-based networks (e.g., Megaport, PacketFabric), but it also attracted other players into the interconnection game – with Equinix as the most visible player, connecting their data centers around the world and pushing their Equinix Fabric “to connect everything everywhere” (and more recently also entering the IaaS game with their Equinix Metal offering).

For companies still designing their hybrid cloud strategy: make sure you stay agile and independent – while a one-stop-shop for data center space, connectivity, and dedicated servers looks great today, it will be hard to change if the economics or performance don’t work that well tomorrow. At Leaseweb, we always keep our options open: we use a wide variety of data centers to host our server platforms and a mix of network service providers (carriers) to ensure connectivity with the right performance/cost balance. We will always make sure that we don’t become dependent on a single technology provider or carrier.

Are My Applications and Data 100% Safe? No, but You Can Protect Yourself.

As in previous years, we also saw our fair share of DDoS Attacks and associated blackmail attempts. Our technology, teams, and partners have proven to provide a solid basis to keep our infrastructure and customers safe, but the increase in the volume and size of attacks remains a concern. Other networks in the Netherlands received major attacks around August and September, but most of these were successfully mitigated, often with the support of the NaWas DDoS Mitigation service (a non-profit service operated by a foundation with the representation of most Dutch ISPs).

More recently – with the Solarwinds hack – we saw that even the most knowledgeable and protected organizations (Microsoft, US Government) can become the victim of targeted attacks. It remains imperative to train all employees on IT security and to have the technology and organization in place to react fast if needed.

Looking Forward to 2021

The IT and robust network infrastructure of the internet have proven to weather the storms in 2020, and I expect it will not become less windy in 2021. Most companies will not return to the pre-Covid home/office working mix and will allow their employees to work more time at home – now that they have discovered that this can even lead to productivity improvements in many situations. This will require continued growth in infrastructure (and decent furniture in our home offices to avoid RSI symptoms!). I’m afraid also the DDoS attacks and hacking attempts won’t stop – and will even become more sophisticated.

At Leaseweb, we will address all of this by ensuring we have top-notch infrastructure and dedicated teams in place – which will also further enable our continued growth in 2021. We are currently deploying our hosting platforms into Japan (fingers crossed that the 2020 Olympics will really happen in 2021!) and we have some more footprint expansion and new services in the pipeline – more to come about that in future blogs and press releases.

I wish you all a Happy New Year – and some time to recover from the hectic events in 2020. Here’s to looking forward to 2021!

– Bart van der Sloot, Managing Director Leaseweb Network