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Google's Own Private Internet

Light Reading
News Analysis
Light Reading
9/20/2005
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Google (Nasdaq: GOOG) is building a network so massive that several service provider specialists believe it could end up with one of the world's largest core transport networks, effectively building its own private Internet.

”This is huge,” says Hunter Newby, chief strategy officer with carrier connection specialist Telx, pointing to several recent indications of the Google network’s scale. “It’s scary. They’re not fooling around.”

Light Reading, which has previously reported on Google's telecom aspirations, has learned that Google is well underway at putting the pieces together (see Headcount: Great Googly Moogly!, Google Backs Powerline Carrier, and Google Talks the Talk). It is accumulating hundreds of thousands of square feet of carrier hotel space that could host giant server farms, buying up fiber, and issuing large RFPs for DWDM and Ethernet-based telecom equipment that could total in the hundreds of millions of dollars, according to multiple sources at carriers and equipment vendors.

By building a core of transport techologies and peering directly to the world's leading incumbent telcos and PTTs, Google could end up securing and controlling distribution of much of the world's Internet traffic, say the sources. Its massive server farms would have a direct link to the backbone.

Google did not return phone calls for this article. In the past, when asked about its telecom networks, the company has declined comment.

One indication of the size of the product is Google’s recent real estate activities. Crains New York Business reported yesterday that Google acquired the rights to 270,000 square feet of space at 111 8th avenue in Manhattan, which is a large telecom interconnection facility. That space is expected to be populated with telecom equipment and server farms running Google's search and other applications such as GoogleTalk (see Google Talks the Talk).

Another service provider operator, speaking under condition of anonymity, says Google's got big plans on the West Coast, where it is negotiating for large amounts of carrier hotel space and hopes to connect to Asia through the largest fiber peering points.

”I could tell you more but they would kill me,” says the interconnection specialist.

Why does Google want to do this? One idea is simply to reduce its telecom costs and peering fees, which many believe are significant. Another idea is that by building its own core network and focusing on Layer 1 and Layer 2, Google could control the distribution and security of much of the content and traffic distributed over the Internet. In a sense, it would be a higher-performance Internet, such as the research network, Internet2.

”My understanding is they want to do remote peering and transit bypass,” says Bill St. Arnaud, senior director of advanced networks at Canarie Inc., who has heard scuttlebutt about the Google network. “By building their own distribution network they don’t have to pay peering costs. Remote peering and transit costs are significant for all the big Internet players. So everybody is thinking of doing this.”

Naturally, equipment provider mouths are watering over the project. Several sources tell Light Reading that Google has issued a DWDM RFP that could be one of the largest Tier 1 service provider contracts, with the total value expected to be in the $100 million ballpark. , sources say, is particularly excited about bidding on the RFP, given its recent victory in similar DWDM networks at and , says one source. Others believed to be in the bidding include Ciena Corp. (Nasdaq: CIEN), , , and Huawei Technologies Co. Ltd.

Because Google is acquiring its own fiber and building Layer 1 and Layer 2 equipment at global interconnection facilities, it can create its peering points at large interconnection facilities, sources say. This would allow it to peer with global PTTs and keep much of its own traffic in a private Layer 2 network, securing and speeding up the performance of much of its traffic.

”This could create a shift in where public IP interconnects,” speculates Newby. “Traditionally, people went to Internet peering points. But because Google is so large, it could be the Internet. People would go there and never leave.”

— R. Scott Raynovich, US Editor, Light Reading

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Scott Clavenna
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Scott Clavenna,
User Rank: Light Beer
12/5/2012 | 3:01:04 AM
re: Google's Own Private Internet
But this is really a dream network. Start with the content, advertisers and service, then build the network. Has anyone been able to do that before? (Don't say Cable MSOs, or even DirecTV).

* There is no legacy traffic to carry,
* all traffic is IP,
* Fiber, Ethernet and DWDM gear has never been cheaper

Sure, you need to hire network architects and operators, but this is such a flat network that it won't even touch the complexity of a typical RBOC infrastructure.

And the business model is so radically different from a CLEC's, which builds a network first, with debt, then builds out some services and tries to find customers.

This, to my ear, spells major heartache for traditional telecoms. Ebay/Skype sounds scary to me; this is even scarier.

Scott
fanfare
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fanfare,
User Rank: Light Beer
12/5/2012 | 3:01:03 AM
re: Google's Own Private Internet
Scott,

I agree. This is a scary scenario for legacy carriers, and the big positive is that they are building from a base of customers not, as you say, the other way around (with debt being the main detractor).

I know you loathe to talk about Broadwing, however, given that they already have much of a newly advanced network in place that capitalizes on ethernet and DWDM ... L2 and 3 .. etc., don't you see this company taking a significant piece of the telecom pie? In other words, if GOOG has the right idea regarding next gen putting away legacy, and given the fact that BWNG is up and running and already signing customers due to the tremendous advantages next gen telecom infrastructure offers, don't you see this niche player having the ability to secure their position with the customers they are chasing? Due to the decrease in telecom infrastructure complexity which will in turn lead to a decrease in cost, legacy is clearly doomed if the new model succeeds. As a result it is logical to assume that these low cost models that have a jump on buildouts will flourish. Since BWNG has a lead in this endeavor, might we not conclude that they will benefit from this shift in paradigm?

Succintly, how long will it take GOOG to build this dream, and how much business do you think companies like BWNG will steal from legacy during this time? As the spotlight turns to illuminate a low cost model with enhanced features such as security ect., companies that are first to market will surely gain traction as telecom customers begin to anticipate the benefits the new model (such as GOOG's infrastructure) brings. Wouldn't you agree?

One last thing: I realize that we are essentially speaking about two different markets, however it all boils down to telecom in the end. If one market segment begins to demand low cost/high capability the rest are sure to follow.

ff
jepovic
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jepovic,
User Rank: Light Beer
12/5/2012 | 3:01:02 AM
re: Google's Own Private Internet
IP, Ethernet and DWDM... Working at one of Europe's largest carriers, I see nothing new here. All major backbones (10G and upwards) have been built like that for years - how else could you build them?

It seems ridiculous to build a major backbone to save on Internet connectivity costs. Google is a major content provider, but far from huge. My guess is that google currently consumes a few Gbit of traffic. The reason is simple: Their web page is very "light". The searching and indexing is surely very server-demanding, but in terms of bandwidth Gmail is probably a bigger destination than google.com. Google can get very nice prices on their Internet connectivity, being a very popular site.

Also, I can't see how controlling the backbone could enhance the end users' experience. In 99% of cases, the access line is the limiting section of the end to end connectivity.

Oh, and Scott, Google building a backbone doesn't scare any carriers. They are already dozens of networks like this, many without debt.

I can only see two reasons for this move:
1) Google is planning some new service which requires huge amounts of bandwidth - probably some kind of video service. To get a reasonable business case for backbone like this, they would need to consume tens of Gbits, preferably a hundred Gbit.
2) Google has gone truly mad, and they believe they need a great network to rule the world. They wouldn't be the first non-carrier to believe that - IBM even tried it twice

dljvjbsl
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dljvjbsl,
User Rank: Light Beer
12/5/2012 | 3:01:01 AM
re: Google's Own Private Internet
http://www.actionengine.com/do...

The above is a survey concerned with the use of data services on cell phones. The issue was why the consumer interest in this service is so much less than expected. The usual issues with small devices with small screens and keys were cited. However a clear conclusion form teh data is that people access data on these devices for teh same reason they access the data network on otehe devices. The killer app is Email.

Another clear conclusion is that there is very little interest in video.

This industry convinced itself that on line pet food stores were going to transform the marketplace. With that proved wrong, the old saw that video is going to drive exponential growth in bandwidth usage had come back into favor.

Why won't this industry listen to its consumers?

Video offers little to no benefit to consumers. They don't wanyt it and they are not going to pay for it.
networker62
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networker62,
User Rank: Light Beer
12/5/2012 | 3:01:01 AM
re: Google's Own Private Internet
I agree, the real reason must be the video. Take a look at "video.google.com"

In contrast to seach-engines, video distribution required a huge amount of bandwith.
The success of the video story will highly depend on their ability to deliver it to the end-user with good quality. I suppose they don't want to put that in the hands of any carrier.

Video production costs (as mentioned earlier) are not an issue since the user community takes care of that. This is a whole new game ...
sgamble
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sgamble,
User Rank: Light Beer
12/5/2012 | 3:01:01 AM
re: Google's Own Private Internet
I think many people are missing the bigger picture here. Even the Guru, Bill St. Arnaud, couldn't have had his Tim Horton's coffee when he was quoted.

It's not just about tranist costs. Although it's a small part of it. Scott got it:

-Cheap
-Simple
-Less people required for monitors and repairs
-Provisioning time reduced
-Transit costs lowered
-SERVICES - the key

Video/IPTV, VOIP, Content, Data Centres, Data Backup and Recovery, Internet and TLS services to start. Pull a Cogent and say - "you want to connect to google backbone meet us at one of our data centres and take care of access yourselves..."

As for the access line being the 'hoser' to all services. Think again man! Fibre is everywhere and with them having their own network they will get awesome wholesale pricing instead of resale for access and IRU.

The vendors are in a price war that is at a peak now. They are dropping their pants just to get in the door. Get a cheap ROADM/DWDM system from a smaller player (Meriton who won in BT with Fujitsu) and a 10Gigabit EThernet switch provider with a sprinkle of MPLS that excels in the application space (Foundry RX series and ServerIrons?). CHEAP.

With all that said - It's gotta be a huge video service they will launch.

Steve.
ozip
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ozip,
User Rank: Light Beer
12/5/2012 | 3:01:01 AM
re: Google's Own Private Internet
The more interesting questions is, how much money do they have to spend. There is a relatively recent Price Waterhouse report on Internet Advertising. It indicates that Internet advertising revenue was about $10B last year with Broadcast & Cable at about $12B (Incidentally, the total US advertising market is about $260B).

When viewed in this context, you can see why many value Google so highly. Internet advertising can only grow (newspapers is still a $50B business) and with advertising models in broadcast changing due to timeshift video and in the introduction of new interactive technology, the winners should end-up being Internet and Cable. As they currently command such a small share of the market, there should be plenty to go round.

As for carrier relevance, please there is no competition here. The only eyeballs owned by Carriers are cellphone users.

Adding hard assets to a household brand, seems like a pretty good idea to me.


OZIP
Scott Raynovich
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Scott Raynovich,
User Rank: Light Sabre
12/5/2012 | 3:01:00 AM
re: Google's Own Private Internet
A lot of people thought paying for ringtones was bizarre too. Now it's a multi-billion dollar industry.
Scott Clavenna
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50%
Scott Clavenna,
User Rank: Light Beer
12/5/2012 | 3:01:00 AM
re: Google's Own Private Internet
Not to be cruel, but "video is of little consumer interest" sounds a lot like one of those famous chestnuts "PCs will never need more than 64k of RAM." or "The Internet isn't suited for commerce."

S
Scott Raynovich
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Scott Raynovich,
User Rank: Light Sabre
12/5/2012 | 3:01:00 AM
re: Google's Own Private Internet
>Another clear conclusion is that there is very >little interest in video.

This runs completely contrary to what I have seen, heard, and understand about basic human behaviour. So I question this research.

In Europe, they are already charging users (successfully) for movie trailers. And they're finding users like to watch drama on their phones (see the BBC's recent deal to broadcast soap operas on mobile phones).
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