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Back to Blog 24 February 2022

What is the Nexus of Cloud Computing, Fibre Optic Technology and Infrastructure?

John Reilly, Infrastructure Manager, ESB Telecoms


Over the last two years, Covid-19 has increased everyone’s awareness of the criticality of telecommunications and computer infrastructure – telecommunications have never been more central to how the world is run. The acceleration of existing trends, such as remote working, teleconferences, and automation, has continued unabated.

Against this backdrop, the telco ecosystem industry continues to evolve, and the convergence of three ongoing developments may lead to further disruption. These are:

  1. Cloud Computing;
  2. Improvements in Fibre Optic Cables Technology;
  3. Ongoing efforts to reduce the cost of access to third party operator infrastructure.

Cloud Computing

First is the rise of cloud-based computing services. Over the last decade, the rise of cloud computing, and the associated data centre infrastructure required to support it, continues to transform the IT industry. This growth is driven by companies looking for cost savings, often touted as c. 30% of an internal IT budget, flexibility and speed of use. Financial innovations such as subscription-based models for Software as a Service (SAAS) have led to annual double-digit growth for companies in that area over the last decade.

These services are provided by well-known internet companies such as Amazon, Microsoft, Google and Facebook. Besides offering IT-type services, internet companies have also entered traditional telecommunications markets. Voice is an example of a steady revenue stream, reasonable margin service, typically associated with telecommunications companies. Voice over IP (VoIP) now supplants it at a far lower cost to the end-user. The data-heavy internet companies can provide content and services at a vastly larger scale, driving down the cost of their service to the customer.

For the traditional companies, the issue is that the new entrants can provide all the standard telecommunications services offered, diluting profit and market share and undermining the market. This development has gained traction over the last decade and has already caused market disruption.

Fibre Optic Cable Technology

The second possible disruption, fibre optic cable technology, has improved hugely since the 1970s, with modern cable offering far superior performance in terms of optical loss, dispersion and latency.

Apart from the technology, the economics of using fibre has increased considerably – with more fibre cores at a lower cost being the overarching trend. Another significant development with optical cable technology is the huge increase in fibre core counts within a cable. Core fibre cable counts have increased from 6/8 fibre cores 30 years ago to several thousand core fibres available today.

The below diagram shows one fibre product, supporting 1,728 fibre cores, provided by AFL Ltd, a vendor used by ESB Telecoms.

Light, in the form of laser light, transmitted into a hair-thin strand of fibre, can typically propagate c. 20km, inside the fibre core, in commercially available fibre cables. This capacity is potentially thousands of times greater than a radio or copper cable connection. There are millions of kilometres of optical fibre wrapped around the globe.

How fibre optic connectivity works is fascinating. A technology known as Dense Wave Division Multiplexing (DWDM) has been the subject of ongoing innovation over the last 30 years.

Specific wavelengths of laser light are used as separate data channels. A wavelength channel can transport 10Gbs of data and, more recently, 100Gbs per channel.

Civil Infrastructure for Fibre Cables

Our third possible disrupter is civil infrastructure for fibre cables. Fibre cables are usually run underground in ducts, i.e., from a data centre to a customer’s premises, such as an office block.

The civil work aspects of providing a fibre cable connection typically comprise c.80% of the costs of a fibre connection, the fibre cable itself being relatively cheap in comparison. This has acted as a barrier to further fibre penetration into premises, as providing a connection can potentially require significant costs.

To reduce costs and minimize the disruption associated with the customer drop or “last mile”, techniques such as underground horizontal core drilling are used to enter a premise. Most business parks are built with a fibre duct network in situ, helping to reduce costs in this area.

Under an EU directive, there are also regulatory moves afoot to mandate operators to make their ducts available to the open market. That means that the cost of leasing ducts providing connectivity, and services, to any premises, should fall over the medium term.

Taken collectively, these developments indicate that the cost of rolling out high fibre cable in a metro environment will fall over time, and fibre densification will continue to increase.

Data Centre to Data Centre Connectivity

From the operator perspective, there are cost challenges to be met in providing fibre connectivity to other data centres and customer connectivity.

For operators with large data transport requirements, it is more cost-effective to lease the fibre from another party and use their in-house technical resources to “light” (connect their equipment to) the fibre than lease bandwidth capacity from another operator. The market for “dark fibre” continues to grow because of the rise of the new operators and their demand for fibre.

Building out a fibre network is an expensive business, so to date, the focus of internet operators is on connecting data centres together, leasing both ducts and installing high count fibre cable. Up to 4,000 fibre cores between data centres are not uncommon.

Direct fibre connections between data centres confer several benefits. Firstly, end-to-end control of the fibre means that network performance can be improved.

Direct connections reduce time delay (latency), which means performance improvements at the application layer. Minimising latency is of increasing importance with the rise of cloud-based computing services, such as video conferencing.

Data transport costs can also be reduced if the distances between data centres are short, less than c.20km. It is possible to connect hundreds of devices, such as computer servers, directly together, using relatively cheap short-haul optics, with high count fibre cables, supporting the connectivity.

Direct fibre connection allows the use of hundreds of fibre cores, each transporting typically from one to eight wavelength channels, to replace more expensive DWDM channels. This can be more cost-effective than using a DWDM platform, with substantial transport cost savings.

Massive IT service scalability then becomes possible, with the possibility of serving millions of customers over the web while simultaneously maintaining high performance and resilience. These types of performance issues and addressing them satisfactorily confers a competitive advantage to the internet operator.

Customer Connectivity from the Data Centre

Providing customer fibre connectivity will remain an expensive proposition, even with cost reductions going in the right direction. For this reason, the focus is on larger types of corporate companies with the financial resources to pay for a direct fibre connection. Direct fibre connectivity to the customer is provided, and a small transport/server node is located on customer premises to enhance the end-user experience, using techniques like edge caching to also improve application performance.

Let's look at how the internet operators initially addressed the intra data centre transport problem with high count fibre cables. It is highly like that, over time, they will seek to provide high count fibre cables directly into customer premises to provide scalability, capacity, and a superior end-user experience.

This network evolution is shown in the diagrams below. They illustrate how the network topology will evolve from current to future architecture. It assumes the fusion of cloud, fibre cable, and fibre infrastructure continue to expand and improve, as outlined above.

The main change to note is that the corporate customer connectivity evolves from transport across the internet, or a telecommunications network, to directly connect to a data centre. Or, to put it another way, the data centre effectively moves closer to the customer. The amount of fibre to the customer also increases, allowing the removal of intermediary transport layers and cost.

All of these developments should ensure continued rapid change within the market, with the arrival of new entrants who are addressing this corporate market niche for large data transport.

ESB Telecoms has offered dark fibre solutions to our customers since 2003. We are a provider of fibre infrastructure, both underground and aerial (power line wrap). We leverage our unique set of assets and expertise to devise creative solutions, working closely with our customers to achieve the best and most cost-effective solution possible.

To find out more about the solutions we offer, contact your customer relationship manager or email