The venerable Economist magazine has made a hash of my research on the growth of the Internet, which examines the rich media technologies now flooding onto the Web and projects Internet traffic over the coming decade. This "exaflood" of new applications and services represents a bounty of new entertainment, education, and business applications that can drive productivity and economic growth across all our industries and the world economy.

But somehow, The Economist was convinced that my research represents some "gloomy prophesy," that I am "doom-mongering" about an Internet "overload" that could "crash" the Internet. Where does The Economist find any evidence for these silly charges?

In a series of reports, articles (here and here), and presentations around the globe -- and in a long, detailed, nuanced, very pleasant interview with The Economist, in which I thought the reporter grasped the key points -- I have consistently said the exaflood is an opportunity, an embarrassment of riches.

I've also said it will take a lot of investment in networks (both wired and wireless), data centers, and other cloud infrastructure to both drive and accommodate this exaflood. Some have questioned this rather mundane statement, but for the life of me I can't figure out why they deny building this amazingly powerful global Internet might cost a good bit of money.

One critic of mine has said he thinks we might need to spend $5-10 billion on new Net infrastructure over the next five years. What? We already spend some $70 billion a year on all communications infrastructure in the U.S. with an ever greater portion of that going toward what we might consider the Net. Google invests more than $3 billion a year in its cloud infrastructure, Verizon is building a $25-billion fiber-to-the-home network, and AT&T is investing another $10 billion, just for starters. Over the last 10 years, the cable TV companies invested some $120 billion. And Microsoft just yesterday said its new cloud computing infrastructure will consist of 20 new "super data centers," at $1 billion a piece.

I'm glad The Economist quoted my line that "today's networks are not remotely prepared to handle this exaflood." Which is absolutely, unambiguously, uncontroversially true. Can you get all the HD video you want over your broadband connection today? Do all your remote applications work as fast as you'd like? Is your mobile phone and Wi-Fi access as widespread and flawless as you'd like? Do videos or applications always work instantly, without ever a hint of buffer or delay? Are today's metro switches prepared for a jump from voice-over-IP to widespread high-resolution video conferencing? No, not even close.

But as we add capacity and robustness to many of these access networks, usage and traffic will surge, and the bottlenecks will shift to other parts of the Net. Core, edge, metro, access, data center -- the architecture of the Net is ever-changing, with technologies and upgrades and investment happening in different spots at varying pace. This is not a debate about whether the Internet will "crash." It's a discussion about how the Net will evolve and grow, about what its capabilities and architecture will be, and about how much it will cost and how we will govern it, but mostly about how much it will yield in new innovation and economic growth.

The Economist and the myriad bloggers, who everyday try to kill some phantom catastrophe theory I do not recognize, are engaging in the old and very tedious practice of setting up digital straw men, which they then heroically strike down with a bold punch of the delete button. Ignoring the real issues and the real debate doesn't take much effort, nor much thought.

[Hat tip to Richard Bennett for the recommendation here..] I haven't had a chance to read through the entire thing yet, but this new study by Nemertes Research seems worthy of attention: "Internet Interrupted: Why Architectural Limitations Will Fracture the 'Net." From the exec sum:

In 2007, Nemertes Research conducted the first-ever study to independently model Internet and IP infrastructure (which we call "capacity") and current and projected traffic (which we call "demand") with the goal of evaluating how each changes over time. In that study, we concluded that if current trends were to continue, demand would outstrip capacity before 2012. Specifically, access bandwidth limitations will throttle back innovation, as users become increasingly frustrated with their ability to run sophisticated applications over primitive access infrastructure. This year, we revisit our original study, update the data and our model, and extend the study to look beyond physical bandwidth issues to assess the impact of potential logical constraints. Our conclusion? The situation is worse than originally thought!

We continue to project that capacity in the core, and connectivity and fiber layers will outpace all conceivable demand for the near future. However, demand will exceed access line capacity within the next two to four years. Even factoring in the potential impact of a global economic recession on both demand (users purchasing fewer Internet-attached devices and services) and capacity (providers slowing their investment in infrastructure) changes the impact by as little as a year (either delaying or accelerating, depending on which is assumed to have the greater effect).

This is a subject that my colleague Bret Swanson has written a great deal about, so I'm sure he'll be commenting on this study at some point. Even if you don't agree with the conclusion Nemertes reaches, as Richard Bennett notes, the report is well worth reading just the background information on public and private peering, content delivery networks, and overlay networks.

Coincident with the news of a few days ago that Microsoft is embracing the Web even for its longtime PC-centric OS and apps, The Economist has a big special report on "cloud computing," including articles on:

- "The Evolution of Data Centres"
- "Software as a Service"
- "Connecting to the Cloud"
- "The Economics of the Cloud"
- The Effect on Business; and
- "Computers without Borders"

PC-centric Microsoft has been moving toward the Net slowly for years. There's MSN search, the Live interactive gaming platform, Web-delivered software updates, and video chat, among other Net-centric applications. But PC software still dominates the company. Today the company finally and fully embraced the cloud. Following Google, Amazon, IBM, Salesforce.com, and others, Microsoft says it has spent $3 billion on its new cloud platform and that its plans are more ambitious than its rivals.

Next year Microsoft will open a 100-megawatt data center (these facilities are measured in power usage now, not in numbers of servers) in Chicago, bigger than anything Google has running.

It's a big shift for Microsoft, technically and culturally. Since most of its competitors were born on the Web, cloud computing isn't so much a shift for them as a natural evolution.

"We're going to create a new operating system for the next 20 to 50 years," [Microsoft chief software architect Ray] Ozzie says. "We don't get an opportunity to rewrite it very often, so we're really making key architectural decisions now for a long time."

PC, RIP.

But what happens when clouds collide?

TiburonTV, a Web video channel out of Berlin, posted a speech I gave last month in Vienna. It was my first visit to the home of those giants of economics and innovation like Mises, Hayek, Schumpeter, Drucker, and Popper. Below is the hour-long talk on Web innovation where I detail some of the most important technologies and coolest rich-media applications that are driving Internet traffic growth. Here's a PDF of the presentation.
exaflood - Bret Swanson - presentation @ talk the future from Tiburon-TV's german stuff on Vimeo.

Here's a good report, "Bring on the Bandwidth," by Peter Day of the BBC. He surveys the new rich media applications driving bandwidth consumption and talks to my old friend George Gilder. Listen to the audio file (28 minutes; 14 MB).

Last week I presented my own research and predictions on the growth of the Internet at the Talk the Future 08 conference near Vienna, Austria. Here's a brief interview I did with Berlin's TiburonTV.

exaflood - Bret Swanson - talk the future from Tiburon-TV - Viktoria Trosien on Vimeo.

Following our own series of articles and reports on the topic, Cisco continues to do interesting work estimating the impact of video on Internet traffic. With the release of two detailed new reports, updating last year's "Exabyte Era" paper, they've now created a "Visual Networking Index."

Cisco's Internet traffic growth projections for the next several years continue to be somewhat lower than ours. But since their initial report last August, they have raised their projected compound annual growth rate from 43% to 46%. Cisco thus believes world IP traffic will approach half a zettabyte (or 500 exabytes) by 2012.

My own projections yield a compound annual growth rate for U.S. IP traffic of around 58% through 2015. This slightly higher growth rate would produce a U.S. Internet twice as large in 2015 compared to Cisco's projections. Last winter George Gilder and I estimated that world IP traffic will pass the zettabyte (1,000 exabytes) level in 2012 or 2013.

For just one example of the new applications that will drive IP traffic growth, look at yesterday's announcement by Advanced Micro Devices (AMD). Partnering with my friend, the young graphics pioneer Jules Urbach, AMD previewed its "Cinema 2.0" project, which combines the best of cutting edge technology and thinking from video games, movies, graphics processors, and computer generated imaging to create new kinds of interactive real-life real-time 3D virtual worlds, all powered not by supercomputers but simple video cards that you find in PCs and Macs, or from servers in the "cloud."

A photorealistic 3D robot and city scene rendered in real-time. (AMD; BusinessWire)

The huge increases in bandwidth and robust traffic management needed to deliver these new high-end real-time services continue to show why net neutrality regulation and other artificial limitations on traffic management are complete non-starters from a technical perspective.

Gordon Crovitz once again caught my attention this morning with his column on why we still crave face-to-face interaction in the twittering new world of digital deal-making and dating. Writing from the "D: All Things Digital" conference in Carlsbad, California, Crovitz quotes several conference veterans on why we still travel to meet people:

Esther Dyson of EDventures, one of the conference attendees, was a pioneer of tech industry conferences such as PC Forum. Asked why even techies flock to conferences, she said that they "want to hear the unofficial story, rather than the sanitized press releases and corporate blogs that they get online." Andrew Zolli, who helps run the Pop!Tech conference, says that these kinds of conferences "are best viewed as 'rituals' in which a self-selected group of people reaffirms their 'tribal identity' through the very act of participation."

This morning in New York the Internet Innovation Alliance hosted two discussions on the Exaflood. Here's video of the first discussion in which I took part, along with Paul Mankiewich, CTO of Alcatel-Lucent; Prof. Andy Odlyzko of the University of Minnesota; and Nick Rockwell, CTO of MTV Networks.

On the second panel were Ciena CEO Gary Smith; Johna Till Johnson of Nemertes Research; Michael Kleeman of UC San Diego; and Craig Moffett of Sanford Bernstein.

Here's another Exaflood-related video I just found. It's of a Telecom TV interview I did in Paris in late February.

Two events of interest to followers of Internet technologies and trends:

First I'll be speaking at an Internet Innovation Alliance event called The Exaflood: Finding Solutions in New York City this Thursday.

Next week we'll move north a few hundred miles to Lake George, NY, for the 12th annual Gilder/Forbes Telecosm conference, also titled "The Exaflood," where I'll be speaking on Internet traffic trends and also on the global economy.