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Web 2.0 and Global Markets – What Changes for Carriers

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Mehran Muslimi
Web 2.0 and Global Markets – What Changes for Carriers

Web 2.0

Broadly speaking, Web 2.0 refers to a new generation of web tools that enable collaboration and information sharing. According to Nielson Netratings, since 2005, community-driven Internet sites have grown from 9% of all online activity to 33%. Blogs, wikis, and social networking sites increasingly interweave the Internet into the fabric of users’ daily interactions, and enable rich communities that reach across geographies.

Web 2.0 trends have also driven explosive uptake of multimedia content such as podcasts and videos, as well as powerful, interactive browser-based applications. The past few years have seen the first generation of web-based tools, for individuals and businesses, that challenge the traditional desktop model. Technology leaders such as Google, Microsoft and IBM all see a strong future in the software-as-a-service model that makes highly capable applications available to any user equipped with an Internet connection and a browser.

While Web 2.0 began its life as a consumer trend, enterprises are increasingly looking to the Web 2.0 model to improve collaboration among distributed users and teams. The McKinsey Global Survey found companies investing in Web 2.0 tools such as blogs (32%), podcasts (35%) and wikis (33%) to improve productivity and move away from an increasingly crushing dependence on email for communication and collaboration.

Globality

The scramble to discover and deploy the right suite of collaborative tools is being driven in part by the increasingly global nature of business today. Markets, supply chains, partnerships, and even workforces are all leveraging opportunities in the full range of established and emerging markets around the world. For leading organizations, bringing together the right pool of vision and capabilities requires sourcing from the largest possible talent base and covering global business centers from New York, London and Singapore to the next generation of hub cities such as Mumbai, Johannesburg, or Dubai.

Telcos in particular can’t afford to ignore the most dynamic and high-growth markets in the world today. According to Internet World Stats, between 2000 and 2007, Internet users grew by 126% in the United States and 86% in Japan, but in the same period, users in China grew by 833%, in India by 1,100% and the Middle East by 1,177%. With China still only at 12% Internet penetration and India at 5%, the growth potential in these markets is dizzying.

Moreover, these dynamic markets are by and large bypassing legacy infrastructures to embrace mobility and cutting-edge technologies such as WiMax. The World Bank reports that achieving 80% country penetration took nearly a century for wireline telephones, but mobile phones hit that landmark in less than 25 years. Without weighty legacy investments to slow adoption, emerging markets are increasingly leapfrogging into the converged, mobile and IP-enabled future.

Business cannot afford to ignore the innovative and dynamic models that are coming from key high-growth markets. In discussing the importance of a “Chindia” strategy for IT investments, Gartner predicts that within this year, China will be developing intellectual property at a rate comparable to current market innovators and points to the range of globally recognized India IT service firms that currently compete on a global scale.

Bandwidth

While the software-as-a-service model promises to reduce upfront investments and eventually enable “thin client” computing, the fuel that drives the Web 2.0 engine is bandwidth. What the full range of Web 2.0 trends – multimedia, interactivity, services, community – for both business and consumers share is heavy and growing bandwidth requirements that will challenge the capacity of existing networks worldwide.

Telcos need to develop a strategy that addresses both the growing demand resulting from Web 2.0, and the “hot-spots” where Web 2.0 intersects explosive market growth.

As the operator of one of the world’s most extensive networks of global terrestrial and submarine cable, Tata Communications has been preparing to address the needs of current and future markets with a US $2 billion investment in infrastructure and services.

To enhance global connectivity, Tata Communications has made two key investments in submarine capacity: the US $200 million TGN-IA cable and the US $250 million TGN-Eurasia cable. The TGN-IA cable improves direct connectivity between key Asian and trans-Pacific destinations, and addresses rapidly-growing demand in the Philippines with potential to extend to Vietnam. The TGN-Eurasia cable provides direct connectivity between India and Western Europe, via Egypt, with potential to serve a range of destinations in the Middle East.

Expansion

Tata Communications has also been working with a range of providers to expand connectivity between high-growth markets to serve a new class of globalizing players.
Tata Communications has acquired a majority stake in South African provider Neotel to expand reach into the continent, and support the needs of South Africa as a growing BPO destination. Efforts with United Arab Emirates provider Etisalat to deliver a jointly aligned range of network services will improve exchange out of the UAE to the spectrum of global destinations.

Optimization

In addition to building new capacity and interconnections, Tata Communications is investing in network services that optimize existing resources to enhance reliability and capacity. We take advantage of the visibility and control offered by our globe-spanning IP backbone to develop the types of network intelligence that support the demands of 2.0 services.

Web 2.0 traffic flows increasingly drive the demand to prioritize traffic according to the needs of the business. Managed network services use real-time network intelligence to allot network resource priority to time-sensitive or business critical traffic. As a result businesses can deploy more sophisticated, demanding applications within existing capacity.

Services

As organizations globalize and move key functionalities into the cloud, Tata Communications has deployed a suite of services to support IP-enablement and global collaboration. Web 2.0 increases demands on all aspects of the network, growing the need for sophisticated management, robust infrastructure, and proactive security. With more than a million square feet in data centers spread across three continents, we provide the infrastructure to support data and application requirements.

As Web 2.0 increasingly interweaves the Internet into enterprise networking, security will be a key concern, particularly defending against a rising number of DDoS attacks. Tata Communications has invested in delivering security capabilities that include a DDoS Detection and Mitigation platform to proactively defend against network threats.

As Web 2.0 uptake continues, video will soon become over 80% of the traffic on the Internet. Content Delivery Networks, which distribute bandwidth-heavy content closer to the user to improve performance, will be strategically necessary for carriers to maintain the economies of scale required to be competitive. The two essential ingredients of a standout CDN service are a strong IP network to drive performance and an efficient, scalable file distribution technology. Tata Communications CDN service reaches around the globe for a superior user experience.

Additionally, we are focused on bringing some of the most powerful collaboration tools to market. For example, our unique network of public and private Telepresence rooms makes the high-end, face-to-face experience of Telepresence available to an expanded range of users.

Change

As carriers consider the global context of Web 2.0, the transformative impact of collaborative trends reveal a potential to catalyze worldwide networks and the businesses they support. With more than 1500 global carrier customers, Tata Communications is working every day to address the opportunities that are driven by Web 2.0 capabilities across an expanded range of global destinations.

By Mehran Muslimi
MBA