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DE-CIX predictions: 5 tech trends for 2023 

By Dr. Thomas King, CTO at DE-CIX
December 2022

2023

Digitalization is accelerating across industrial sectors. Even non-digital products demand digital processes and value chains, and more and more products and business models rely on data and the provision of digital services. Whether it’s managing a multi-cloud scenario, building a smart factory, or ensuring connectivity to partner networks, companies require a combination of low latency, security, and absolute reliability in their network connections. Here, a significant role is played by Internet Exchanges (IXs). They guarantee a smooth, secure, and fast exchange of data packets between networks of any size, ranging from city carriers to streaming providers, cloud service providers and enterprises. Dr. Thomas King, CTO at DE-CIX, has identified 5 trends that will shape the connected business world, the further evolution of technology, and the interconnection business in 2023.

1. Enablement of cloud-to-cloud communication

The cloud has become essential to the smooth running of any modern business. However, regulators around the world are increasingly concerned about cloud concentration, where companies become dependent on a single provider. More and more companies are adopting a multi-cloud strategy, which not only mitigates over-reliance on one provider, but also allows companies to cherry-pick the best services from different cloud providers and prevents vendor lock-in. But simply sourcing services from multiple clouds is not in itself a complete solution. As a result of data portability challenges, companies may find it challenging to switch between cloud providers, so individual workloads and applications may remain siloed on single clouds. This is also the case for certain cloud providers that offer proprietary applications not available through other providers (e.g. certain AI applications). 

Cloud routers on interconnection platforms will become more widespread in 2023, enabling cloud-to-cloud communication by ensuring that latency is minimized and available bandwidth is maximized, so that the different applications in two or more clouds can interact with each other as if they were hosted in the same cloud. This improves interoperability between all cloud environments and the given application, enabling the synchronization of data across a diverse operator landscape. This, in turn, will give a further boost to multi-cloud scenarios, making them easier to manage and providing added protection for critical company data.

2. Scaling up 5G use cases  

Unlike previous mobile network generations, 5G is not a single technology. Instead, it is a set of different standards, incorporating various features on multiple layers. This includes the frequency used, modulation and multiplexing, and the latency – developed with specific use cases in mind, such as improving mobile broadband, optimizing machine-to-machine communication for massive arrays (MMIMO), and offering ultra-reliable low latency communications (uRLLC) for time-critical use cases. The deployment of 5G is still only in its infancy, even though it feels like it has been around for years. Certainly, we already have 5G on our mobile phones, but that is just the radio access network (RAN), rather than edge networking, service virtualization, and function chaining, etc., which are envisioned as features that will come with software integration. As companies begin to use 5G for IoT at scale and productize it, we will see further evolution of the technology stack to meet growing commercial demands. 

As it evolves, 5G will become a game-changer: it can enable peak data rates of up to 20 Gbit/s, with up to 1 million devices connected per km2, and data transmission is highly reliable, with a latency of as low as a single millisecond. The 5G campus network is set to revolutionize the manufacturing industry, with manufacturers from the automotive sector, like BMW, Mercedes-Benz, VW, and Ford, taking the lead in building and testing their own 5G campus networks for IoT scenarios. We won’t know the full operational force of 5G – as an enabler of innovations, products, and services – for the better part of a decade, as increasingly complex futuristic use cases are brought to reality. But we expect to see more and more fully scaled productive use cases in the next 12 to 24 months.

3. Connectivity resilience is becoming a must

For digital business, being able to trust its connectivity infrastructure and ensure its reliability and resilience is essential. Unfortunately, in the real-world incidents and outages are par for the course, and are a growing concern for companies needing to protect their data and digital assets. Therefore, another trend is the drive to build company connectivity to minimize the impact of external events on data flows relating to company operations and business continuity. A Multi-X strategy – using multiple technologies, multiple locations, and multiple providers – is an excellent solution for the design of company-own and outsourced infrastructure. By building multiple layers of redundancy, it is possible to design a company’s digital infrastructure for critical data flows to prevent single points of failure. 

A Multi-X strategy offers a roadmap for building redundancy in terms of technology (e.g. using servers, routers, and other network components of different designs and from different manufacturers), ensuring that data storage is geographically distributed across multiple data centers and using redundant non-overlapping fiber pathways to connect the various locations, and also developing robust business relationships with a range of digital infrastructure providers to avoid vendor lock-in.

4. Network as a Code – Gaia-X project Tellus will become operational

Network as Code is the next big thing in connectivity infrastructure. As digital infrastructure becomes more and more important for businesses, it is also becoming more complex and harder to manage. Network as Code is a technology that enables the programmability of the different network components to develop network architecture as software. This makes it possible to leverage all of the advantages coming out of the software industry, such as repeatability, versioning, and continuous configuration automation. The IX-API consortium does exactly this, providing interconnection services from IXs, data centers, and ISPs, packaged as a Network-as-Code element. 

The Project Tellus, funded as part of the European data infrastructure project Gaia-X, is going a step further, by not simply packaging interconnection services from data centers, IXs and ISPs, but spanning the entire supply chain of different interconnection providers. This is a software-based network using integrated software instances and homogeneous interfaces, going beyond the limits of individual providers, and remaining independent of the public Internet although being supported by its infrastructure. The software TellusX will be installed on devices as well as on components of cloud and network services. All Tellus-enabled devices, providers, and services can communicate with each other in an automated way, announcing their requirements and confirming compliance. This eliminates the effort of configuration and enables a secure, high-performance, and automated connection between specific locations and to cloud service providers, configured for the given use case. The first versions of TellusX are planned to be operational in 2024, providing a much-anticipated component of the Gaia-X infrastructure design.

5. Building the foundation for the immersive tactile Internet (aka the “metaverse”)

The dream of the immersive tactile Internet (aka the “metaverse”) has been gaining ground in the last year: a digitally engineered 3-dimensional virtual space, where digital twins of ourselves will interact in an environment that blurs the line between physical and virtual – where we will be able to shake hands with our business partners and look them in the eye as we negotiate or socialize with them in cyberspace, experience shopping and gaming on a whole new level, and still hug our children good night, even when we’re on a business trip. In order for science fiction to gradually resolve into science fact over the next couple of decades, each of us will need to be well-equipped with sophisticated gadgetry powered by VR and AI, which will be interconnected in a fine mesh of high-performance networks to ensure the synchronized and seamless delivery of video, audio, sensory, and cyber-locational data to and from our physical location.

Digital infrastructure providers are already working to provide the foundation for what will become the cyber-physical continuum. Given that it takes as little as half a millisecond for the human mind to perceive delays in sensory input (depending on the sense in question), latency must be kept as low as possible in the tactile Internet. This means that digital infrastructure – networks, data centers, and interconnection platforms – will need to be built out densely in all directions. For the lowest-latency use cases of the immersive Internet, the distance from the user/device to the location of data processing should be max. 35-50 kms. And this will be needed everywhere, not just in digital hubs. No digital infrastructure provider will be able to build all of this alone. Certainly, the Internet giants are already beginning to build some of this infrastructure, often working together in consortia to finance the investment. Social network giants, VR companies, producers of graphic chipsets, and gaming companies, to name just a few of the sectors involved, are all working on their version of, or their contribution to, what has been coined the “metaverse”. Infrastructure providers of all kinds – fiber, mobile, and satellite network providers, content distribution networks, content networks, data center operators, cloud service providers, and interconnection specialists – will need to work in concert in an increasingly fine-grained manner the world over to create the interconnected mesh of infrastructure that will support the use cases of the immersive Internet. The first applications of the metaverse are already up and running – but the killer applications are around the corner, waiting for the infrastructure to bring them to life.

The bottom line

End users are demanding better performance of their digital products, meaning that companies are needing to digitalize their processes to cope with increasing demands. They, in turn, need the support of a variety of digital infrastructure partners – from data center operators, Internet service providers, and cloud service providers, to IT systems integrators, and on to interconnection specialists like Internet Exchange operators. Digital infrastructure providers are working to provide the foundations for modern business, not only to people and companies in digitally developed centers, but also in previously less well-served regions. The guiding principles are the basic needs of our digital age: flexibility, security, resilience, and speed.