Forecast Overview

Global data center traffic:
• Annual global data center IP traffic will reach 6.6 zettabytes by the end of 2016. By 2016, global data center IP traffic will reach 554 exabytes per month (up from 146 exabytes per month in 2011).

• Global data center IP traffic will nearly quadruple over the next 5 years. Overall, data center IP traffic will grow at a compound annual growth rate (CAGR) of 31 percent from 2011 to 2016.

Data center virtualization and cloud computing transition:
• The number of workloads per installed traditional server will increase from 1.5 in 2011 to 2.0 by 2016.

• The number of workloads per installed cloud server will increase from 4.2 in 2011 to 8.5 by 2016.

• By 2016, nearly two-thirds of all workloads will be processed in the cloud.

Global cloud traffic:
• Annual global cloud IP traffic will reach 4.3 zettabytes by the end of 2016. By 2016, global cloud IP traffic will reach 355 exabytes per month (up from 57 exabytes per month in 2011).

• Global cloud IP traffic will increase six-fold over the next 5 years. Overall, cloud IP traffic will grow at a CAGR of 44 percent from 2011 to 2016.

• Global cloud IP traffic will account for nearly two-thirds of total data center traffic by 2016.

Regional cloud readiness:
• North America and Western Europe led in broadband access (fixed and mobile) in 2011 and will continue to lead in this category through 2016. However, all regions will show measurable improvement in broadband access to their respective populations throughout the forecast period. Asia Pacific leads in the number of subscribers throughout the forecast period due to the region's large population (see Broadband Ubiquity section for details).

• Western Europe leads all regions with an average fixed download speed of 11.7 Mbps. North America follows with an average fixed download speed of 10.3 Mbps. Asia Pacific and Central and Eastern Europe lead all regions in average fixed upload speeds of 6.7 Mbps and 5.9 Mbps, respectively (see Download and Upload Speed Overview section for details).

• Western Europe and Central and Eastern Europe lead all regions in average fixed network latency with 58 ms and 59 ms, respectively (see Network Latency section for details).

Evolution of Data Center Traffic

In just the past year since the first Cisco Global Cloud Index was released, the industry has seen cloud adoption evolving from an emerging technology to an established networking solution that is gaining widespread acceptance and deployment. Enterprise and government organizations are moving from test environments to placing more of their mission-critical workloads in the cloud. And for consumers, cloud services offer ubiquitous access to content and services, on multiple devices, almost anywhere network users are located.
Qualitatively, the main drivers for cloud adoption include faster delivery of services and data, increased application performance, as well as improved operational efficiencies. While security and integration with existing IT environments continue to represent concerns for some potential cloud-based applications, a growing range of consumer and business cloud services are currently available. Today's cloud services address varying customer requirements (for example, privacy, mobility, and multiple device access) and support near-term opportunities as well as long-term strategic priorities for network operators, both public and private.
Quantitatively, the impact of cloud computing on data center traffic is clear. It is important to recognize that most Internet traffic has originated or terminated in a data center since 2008. Data center traffic will continue to dominate Internet traffic for the foreseeable future, but the nature of data center traffic is undergoing a fundamental transformation brought about by cloud applications, services, and infrastructure. The importance and relevance of the global cloud evolution is highlighted by one of the top-line projections from this updated forecast-by 2016 nearly two-thirds of data center traffic will be cloud traffic.
The following sections summarize not only the volume and growth of traffic entering and exiting the data center, but also the traffic carried between different functional units within the data center.
Global Data Center IP Traffic: Nearly Four-fold Increase by 2016

Figure 1 summarizes the forecast for data center IP traffic growth from 2011 to 2016.
Figure 1. Global Data Center IP Traffic GrowthThe Internet is forecast to reach the zettabyte era in 2016, but the data center has already entered the zettabyte era. While the amount of traffic crossing the Internet and IP WAN networks is projected to reach 1.3 zettabytes per year in 20161, the amount of data center traffic is already 1.8 zettabytes per year, and by 2016 will nearly quadruple to reach 6.6 zettabytes per year. This represents a 31 percent CAGR. The higher volume of data center traffic is due to the inclusion of traffic inside the data center (typically, definitions of Internet and WAN stop at the boundary of the data center).

The global data center traffic forecast, a major component of the Cisco Global Cloud Index, covers network data centers worldwide operated by service providers as well as private enterprises. Please see Appendix A for more details on the methodology of the data center and cloud traffic forecasts, and Appendix B for the positioning of the Global Cloud Index Forecast relative to the Cisco VNI Global IP Traffic Forecast.