Suppose the core backbones are growing at 60% a year. If 10G pipes became 'too small' to manage current backbones in 2007, then when does 40G become too small? Math says in just 2 years, in 2010 (can you say AT&T?). Any guesses how many years it takes to make 100G too small? Only 2 years later in 2012 those 100G circuits we don't even have yet won't be enough any more. And how about the fabled Terabit (Tbps?) Too small in 2017. Exponentials are like that. As Infinera's Singh pointed out at NXTcomm08 the other day, it has taken 8 years since 10G came out to make 40G economically feasible. If technological advancement doesn't speed up, the 'exaflood' really will break the internet like AT&T says it will. Scary, eh?
But this is just the dilemma of Malthus, that food production cannot keep pace with population growth and therefore a collapse is inevitable, but now restated in a technological format. And the assumptions behind it are, in my opinion, just as wrong this time. Technological development of 40G and 100G has lagged *because* they didn't make sense yet. If internet growth applies pressure, there will be big economic payoffs to those who solve the problem - hence the problem will get solved. If it is slow, then prices will go up for bandwidth and growth might slow - but then speed up again with the next advance. And at least a few mega billionaires will emerge from those advances - it's just the nature of the beast.
Optics has been a tough place to be for a long time. Some carriers may fear the so called 'exaflood' because it is their business models which will have to bear the strain any mismatch between demand and what technology can supply. But guys like Infinera's Singh hope for it, root for it, even revel in it, because they know that pressure from internet growth is the only thing will make optics fun again like it was 8-10 years ago. And if you can't tell that Singh is having fun right now, you aren't looking carefully... He's like the first boy at the top of a monster sledding hill the morning after a big snow, and he's got all day.
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