The new year is upon us again, which means that it is time to dig the crystal ball out of the closet again and make a few predictions. The pandemic isn’t exactly gone, but it’s definitely in the rear view mirror for most everyone. So what do our headlights show in the distance now? If history is considered, I shouldn’t really try to guess. But who asked history?
- Artificial Intelligence will become a major driver of infrastructure. If you haven’t seen a reference to the exploits of ChatGPT recently in the news, you haven’t been paying attention. AI in the infrastructure space isn’t really about this sort of thing, but public perception of next gen technologies matters a lot when justifying infrastructure investment. The fascination with ChatGPT will only grow and thus bring AI from a perceived future driver to a current one, even as the industry moves to put other forms of AI and ML to work in less high profile ways.
- The industry will move to quantify ESG, but won’t succeed (yet). The rise of Environmental, Social, and Governance factors in the investment world has been quick, but its weakness has been a vulnerability to hype. It’s difficult to measure and track in any meaningful way, but there are moves afoot to do just that in order to give investors something more tangible to work with. But I think the motivation by all parties to be able to claim ESG success is too strong to be subdued in the short term.
- It’s time for 6G. I mean, you can find references to 6G already out there, but there’s no there there. But 5G’s problem is that it has been the next big thing for long enough that it’s not new anymore, and we’re now down in the nitty gritty of actual deployment and use of all this new infrastructure. 6G technology, or whatever name it actually takes, will start to take shape at least in terms of mutually agreed capabilities and a roadmap, if only because we need something new to talk about.
- A SASE Explosion — Never has the target market out there been more ready for an upgrade than today’s enterprises are for SASE. The broad awareness of the benefits of streamlined, manageable, secure internet access for their workforce means that enterprise uptake of SASE will happen quickly once the solutions are sufficiently stable and well understood. We will see revenues shift from older products faster than the original (and still ongoing) MPLS-to-SD-WAN shift.
- M&A will be a private money thing — With asset multiples still high and stock prices not so much, strategic acquisitions for scale by larger infrastructure operators make less sense than organic growth. Build outweighs buy, unless you are starting from just money. So the M&A world will be driven by infrastructure funds, private equity, and the like. That said, a few more specific ideas:
- A last mile roll-up will start to gain steam. I don’t know who, but some entity out there will come up with a formula for scaling FTTH projects beyond the regional level and start buying assets in bulk.
- A data center operator will buy its way into the energy field more directly somehow. Data centers and energy utilities are becoming more closely linked. As huge consumers of energy, data centers are keenly aware of the slower pace of progress one finds in the utility space and sooner or later someone will take matters into their own hands. It will probably be in the alternative energy space, and might be backed by the resources of a hyperscaler.
- A Hyperscaler will join the efforts to build an Artic cable system in force. Someone will enter the game, finally providing the financial muscle necessary to make such a project truly viable to build and operate.
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