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​Internet of Things craze sweeps NZ as data traffic prepares to double by 2020

“Digital transformation is happening quickly, and has the potential to improve the way New Zealanders live and work."

New Zealand IP traffic, comprising the Internet as well as managed networks such as video-on-demand services, will double to reach 50 Gigabytes per capita, at a compound annual growth rate (CAGR) of 15 percent, by 2020.

According to the Cisco Visual Networking Index, this is the equivalent of all movies ever made crossing New Zealand’s IP networks every 25 hours with the country’s Internet traffic set to reach the equivalent of more than 72,000 DVDs per hour within four years.

With strong immigration driving population growth, 500,000 more Internet users are expected to join the country’s online community and boost traffic volumes.

In addition, the tech giant claims the number of Kiwis online is predicted to grow from 3.9 million in 2015 to 4.4 million by 2020, capturing 94 per cent of the population while globally, only 52 per cent of the population will be internet users by 2020.

However it is the twin trends of digital transformation and the Internet of Things sweeping the globe that will have an even greater impact on our traffic growth.

By 2020 New Zealand’s IP networks will support 17 million more devices and connections, increasing from 20 million in 2015 to 37 million by 2020.

Applications such as video surveillance, smart meters, digital health monitors and a host of other machine-to-machine services are creating new network requirements and driving traffic increases. By 2020, machine-to-machine connections will account for 70 per cent of New Zealand’s total IP connections and there will be 7.7 devices / connections per capita.

“Digital transformation is happening quickly, and has the potential to improve the way New Zealanders live and work,” says Glen Bearman, Head of Digital Transformation, Cisco New Zealand.

Bearman says faster broadband speeds are also driving growth in IP traffic, with the Government-sponsored Ultra-Fast Broadband rollout playing a leading role - New Zealand’s average fixed broadband speed in 2015 was 19.5 megabits per second (Mbps) however this will jump 2.5 times by 2020 to reach 49.1 Mbps.

For Bearman, these speeds will see New Zealand jump ahead of the global average of 47.7 megabits per second in 2020, and rank near the fastest speeds globally, which will average around 51 Mbps across North America, Western Europe and Asia-Pacific.

Meanwhile, the average mobile connection speed will triple, reaching 18 Mbps in 2020, while the average Wi-Fi speed from a mobile device will double to 25 Mbps over the same period.

“Higher speeds mean the consumption of rich media will continue to rise, with video being the dominant application across the globe,” Bearman adds.

“Kiwi households are embracing video-on-demand subscription services such as Netflix, while business are creating more video content to promote their products and services, as well as using collaboration technologies such as video conferencing to boost productivity.”

By 2020, Bearman says IP video will double to comprise a staggering 84 percent of the country’s entire IP traffic, up from 74 per cent in 2015, with the majority being HD (high definition) and Ultra HD.

With the growing dependence on mobile and fixed broadband networks, security concerns are increasingly becoming top of mind for service providers, governments, businesses and consumers.

The new DDoS (Distributed Denial of Service) analysis suggests that these types of breaches can represent up to 10 percent of a country’s total Internet traffic while they are occurring.

Over the next five years, DDoS attacks are projected to increase from 6.6 million to 17 million attacks globally with Bearman claiming that these initial findings underscore the need for more comprehensive security measures to protect data and reduce network exposure to such risks.

Going forward, Bearman points to three major considerations for businesses.

“Firstly, businesses are in a war of attraction to attract and retain employees and customers,” he says. “As the best and brightest enters the workforce they will expect flexibility in how they engage with the workplace.

“The same stands for the customer experience. It is increasingly a digital one, so it’s imperative to get it right - there are no second chances.

“Secondly, you must have the right role leading digital for your organisation - should it be the CIO or CDO (chief digital officer)? The CIO role is as critical as it ever was in terms of ‘keeping the lights on’ and being a strategic advisor.

“But with digital, it may not be necessary to create a new CDO role. Instead, it could be consumed ‘as a service’ just like many other areas of IT.

“Finally, digital needs strong leadership from the top, and executive sponsorship of a digital transformation programme is critical.

"The executive must set a clear plan, and lead by example - and that means using new digital tools and processes to give others confidence that innovation really does work.”