The Rise of Internet 3.0

When I co-founded Inphi 20 years ago, the global communications infrastructure largely consisted of telecom circuits designed to carry voice over long distances. The emergence of the internet and e-commerce promised a new digital world that would connect billions of people and enable us to do things online that were not possible before. Billions of dollars were poured into optics and optical communications. Hundreds of thousands of miles of new fiber optic cables were laid by incumbent telcos and upstarts. Early e-commerce and “search engines” caught on, but these “killer apps” only filled up a fraction of the newly available bandwidth.  Then, the bubble collapsed. The “build it and they will come” mantra that led to the funding of indiscriminate and in some cases, ridiculous online businesses, proved to be false. It was built, and “they” did come, but unfortunately, not enough of “them” stuck around to pay the bills. As a consequence, the optical communications industry went into dormancy for several years. So much for Internet 1.0.

However, seeing the advantages of the new medium, a wide range of industries embraced the internet. As bandwidth became plentiful and cheap, an entirely new world emerged. Google, founded in 1998, grew from a curiosity to a daily necessity for many of us by the turn of the decade. Facebook was born in 2004, YouTube 2005, Amazon Web Services and Twitter in 2006. The year after, Netflix launched the first streaming video service and Apple released the first iPhone. The seemingly unlimited bandwidth of Internet 1.0 was gobbled up. The phase of global, social, and mobile everyday use heralded the Internet 2.0 era.

Historical global internet traffic and reported spike due to COVID-19
Figure 1: Historical global internet traffic and reported spike due to COVID-19

Then the Great Financial Crisis hit. This time, however, something strange happened. The internet infrastructure continued to expand at a furious pace during the crisis, not in traditional long haul telecom networks, but inside data centers. In fact, Cisco’s Global Cloud Index 2015-2020 report estimates that only 14% of internet traffic is from a data center to users, 9% between data centers, and a whopping 77% never leaves a data center. Cloud computing became a common and well understood term. Uber, Lyft, Airbnb, and a long list of other new cloud enabled start-ups scaled rapidly during this phase of the rise of Internet 2.0. Internet 2.0 withstood the Financial Crisis without missing a beat.

And now, COVID-19 hit. Billions of people have been asked to stay home. If Internet 1.0 hit a crisis and collapsed, and Internet 2.0 stayed the course through its crisis, in this new period, which I will call Internet 3.0, COVID-19 has proven to be a powerful catalyst for accelerated use of and reliance on the Cloud. As noted by Dr. Ford Tamer, Inphi’s President and CEO, in his blog post dated April 22, 2020, bandwidth consumption in the age of COVID-19 increased significantly. Video conferencing and chats have become our portal to the outside world. This weekend, I joined a Messenger group chat with my 93-year-old mother who lives alone in North Carolina, along with my niece who lives in Connecticut and two sisters who live in North Carolina near my mother, to wish my mother well and keep her spirit up. It was great fun. We had never done this before COVID-19 and will no doubt do it again. Whereas group chat was difficult with just a telephone, video chats seem very real and natural.

Internet 3.0, however, is much bigger than video conferencing. Time with virtual reality headsets and interactive, bandwidth-intensive entertainment has spiked during these recent weeks. Enterprises of all sizes are rethinking how business will be done and how to use software and robotics to maintain safe distances on production lines, or as one of our customers put it, this is the arrival of Factory 2.0. In addition, compute-intensive artificial intelligence (AI) is being applied aggressively to make sense of the mountains of daily data-points collected and transmitted, about the spread, course and potential resistance to/vaccine against this virus.

COVID-19 is accelerating the transition to a new digital universe. Global internet traffic spiked 40% at the onset of social distancing mandates, versus the normal growth of 26% a year. This unprecedented growth in bandwidth demand exposed weaknesses in today’s internet infrastructure, which was designed to handle massive Cloud computing work loads within a data center and one-way video streaming from data centers to end users. It was not optimized to handle real time, multi-way video conferencing by hundreds of millions of end users. Lack of bandwidth in the access layer created jerky videos and unintelligible voices. Long delays in the core network caused severe lags in real time communications, exposing the potential shortcomings of its original design.

At Inphi, we are in the “bandwidth business.” Several years ago, we coined the terms “The Data Center is the Computer ®” and “The Cloud is the Network ®” to set the vision and strategic directions for the company. The R&D investments we have made in the past decade will help to enable a new, unencumbered digital universe which I believe will be fundamentally different than the one we have today. This is the digital universe of Internet 3.0. Our investments have resulted in technologies that are indispensable to Internet 3.0.

Coherent Transmission Dramatically Increased Fiber Capacity in Long Haul and Metro Networks.
Digital communication was forever changed with the commercial deployment of 100G coherent transmission in 2010. Coherent transmission utilized advanced Digital Signal Processing (DSP) techniques that can transmit four or more digital bits in the same fiber as compared to the old transmission of 0s and 1s. Since 2010, coherent transmission has nearly doubled fiber capacity every four to six years, from 8 Terabits (8T) in 2010 to 16T in 2014, and about 25.6T by end of this year. Inphi 400G coherent DSP solutions, which won the 2019 Lightwave Magazine Innovation Honors with the highest score of 5.0, will be key components that solve the bandwidth bottleneck in long haul and metro networks.

Pulse Amplitude Modulation (PAM4) Doubles the Bandwidth Inside Cloud Data Centers.
Similar to what happened in long haul and metro networks, fiber capacity inside data centers is reaching its maximum for the old transmission of 0s and 1s. Advanced DSPs, linear receivers and linear transmitters again are coming to the rescue. In 2015, Inphi announced the world’s first 40/50/100/400G IC solution that used a new PAM4 modulation for Cloud interconnect. Since then, PAM4 modulation has been adopted by the various Ethernet standard groups and will enable Cloud providers to transition from the current 100G to 400G inside data centers.

Edge Computing Will Accelerate the Transition to a Digital Universe.
Ten years ago, Amazon found that every 100 milliseconds of latency cost the company 1% in sales. In 2006, Google did an experiment and found that an extra 0.5 seconds delay dropped traffic by 20%. The speed of light, unfortunately, cannot be improved due to the laws of physics. The only way to reduce latency is to locate data centers close to end users. Well before COVID-19, Microsoft CEO Satya Nadella had been talking about the need for Edge computing, which is key to minimizing latency in future network architectures. Inphi’s broad portfolio of coherent and PAM platform solutions will provide the key components to enable Edge computing.

Distributed Cloud Data Center Architecture Should Solve the Bandwidth Bottleneck.
The Cloud of the future will be distributed over many regions of the globe. Long haul coherent optics will be used to connect data centers from different regions. Lower cost, lower power “ZR optics” will be used to connect data centers within an 80 kilometer distance in a region. Inphi is the early pioneer and leader in ZR optics. In 2016, we launched an innovative 100G ZR optics product, which we called COLORZ®, to enable the massive roll out of the Microsoft Regional Data Center Architecture. Inphi’s next-gen 400G ZR optics, COLORZ® II, which also won the 2019 Lightwave Magazine Innovation Honors with Highest Score 5.0, will be a key component to enable the shift from global to distributed Cloud data center architecture.

Highly Integrated Electro-Optics Solutions Will Dramatically Increase the Bandwidth in the Cloud.
The race to deliver ever more bandwidth in the cloud will not stop at 400G. Inphi recently announced the world’s first 800G PAM4 electro-optics platform for Cloud and AI networks. The next bit rate, 1.6T, will require even further integration, advanced DSP, 3-D electro-optics solutions. Inphi teams around the globe are already hard at work developing these fundamental building blocks to enable the build out of the Internet infrastructure of tomorrow.

Some pundits are worried that this bandwidth spike due to COVID-19 is temporary, and after the virus is under control, demand will collapse. On the contrary, I believe the transition to the new digital universe in which we can work, interact with people, play games, watch movies and attend events in real time from anywhere, has just begun. The cultural impact of this transition is in its infancy, but the changes in human behavior are already self-evident. Sending digital bits over fiber takes a lot less energy than traveling in the flesh and will slow down the transmission of infectious diseases. It will save enormous fossil fuel and may even pull the planet from the brink of disaster. I believe that bandwidth demands will accelerate, not abate, long after the virus is controlled. Once, the hope was “if we build it, they will come”. Today, “they” are already here. We are working full-throttle to help build “it” so that Internet 3.0 realizes its full potential.

*Additional References:
Wikipedia Internet Traffic
Cisco Visual Networking Index: Global Mobile Data Traffic Forecast Update, 2017–2022
The History and Future of Internet Traffic, Aug 28, 2015
Craig Labovitz’s Blog, April 02, 2020