Tuesday, September 30, 2014

Internet players invest $100 billion in physical Internet over three years

UK: A new study from telecoms specialist firm Analysys Mason shows Internet players invest over $30 billion per annum in physical networks, facilities and equipment, and nearly $100 billion between 2011 and 2013.  The lion’s share of this ($30 billion over three years) goes to Europe.

It is the first time this investment has been captured in a comprehensive way, and highlights how Internet players are now major contributors to the fabric of the Internet. This includes data centres, submarine cables and the multitude of servers that store, process and serve content to end users.

This is necessary to deliver the content that end users want, and comes in addition to the money these companies spend on content and software. It benefits the Internet as a whole, end users, and the other players who invest in the physical fabric of the Internet.

Companies highlighted in the study include ‘pure’ online companies such as Spotify, Google or Facebook, as well as online businesses of multi-platform players such as the BBC or the New York Times.

Europe is the largest destination for this investment: over a third, amounting to $10 billion annually, goes into European networks and facilities. This recognises Europe’s role as a hub for Internet traffic.

Many international cables meet in Europe. It hosts the world’s largest IXPs, and has a large population of Internet users. As a result, it is attracting investment by US companies, especially in data centre facilities, as well as investment by local Internet players such as Spotify and the BBC.

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