If you look at the amount of data being created by billions of devices and collected and consumed in cloud data centers then yes, the cloud and the Internet of Things (IoT) will become big demand drivers for high-speed connector manufacturers. It also will multiply their design challenges, creating the need to work more closely with their customers and supply chain partners.
Gartner Inc. reports that more than $1 trillion in IT spending will be affected by the shift to the cloud over the next five years. The market research firm estimates the aggregate amount of cloud shift in 2016 to reach $111 billion and increase to $216 billion in 2020.
"Cloud-first strategies are the foundation for staying relevant in a fast-paced world," said Ed Anderson, research vice president at Gartner, in a statement. "The market for cloud services has grown to such an extent that it is now a notable percentage of total IT spending, helping to create a new generation of start-ups and "born in the cloud" providers."
Gartner analysts also expect the adoption of the IoT to drive platform as a service (PaaS), where cloud providers deliver hardware and software as a service. More than 50 percent of new applications developed on PaaS will be IoT-centric by 2020, disrupting conventional architecture practices, according to Gartner.
Combine this with an estimated 6.4 billion connected “things” in 2016, reaching 20.8 billion by 2020, according to Gartner, this generates a lot more data that must be handled over traditional copper interconnect systems. And it has to be performed at faster data rates while maintaining the same or better performance.
One of the biggest challenges is how to satisfy that growth in hyperscale computing, or cloud data centers, said Nathan Tracy, technologist, System Architecture Team and manager of industry standards, TE Connectivity Data Communications.
As more enterprises outsource their requirements to the cloud, the ramp up or scale of cloud businesses is growing tremendously, he said.
“As technology enables these migrations to the cloud it’s amazing how much of the network is going to be at a handful of companies,” Tracy added. “The cloud hasn’t let us down in terms of security or replication. The stakes are so high for them not to let anything go wrong that I don’t see that trend stopping. It’s a swing going from local enterprises and telcos to this handful of cloud-scale companies.”
Data-center buildout including cloud services is a key market growth driver, agreed Jim David, portfolio director for high-speed I/O products, Amphenol High Speed. There is a real trend with enterprises going the route of cloud-based services so they don’t have to worry about hardware, maintenance, or any related issues, he added.
“They are offloading the whole burden and responsibility to the cloud service supplier,” said David. “There is some real attraction to customers to do that particularly for startups and smaller based customers.”
Connector manufacturers also agreed that the IoT will have a big impact. The reality is that it will leave a lasting mark on the industry, said Tracy.
“The IoT doesn’t create a big data load but it creates billions of data points that have to managed through the Internet, i.e., the cloud computing data centers to get to our smartphones or wherever that data is headed,” he continued.
It’s a massive amount of data that is being captured by all of these devices – phones, PCs, and hardware innovations like Fitbit, David said. “The analysis and filtering of that data could allow someone to make an informed decision around that data. All of this drives the bandwidth needs in the marketplace.”
“I don’t see this slowing down,” he added. “Whether it’s a medical or industrial piece of equipment or entertainment hardware or something that is on your body or is being monitored on a daily basis, this is all driving data being used by the customers and people capturing all the data. This will continue on a healthy basis going forward.”
Must Go Faster
The shift from traditional enterprise to cloud-scale deployments combined with the transition from 10 Gbit/s to 25 Gbit/s and 50 Gbit/s data rates are driving some big changes in the interconnect industry, not only in terms of design but also partnerships.
“When you talk about cloud scale, it’s a handful of companies that are driving the demand so they have a much louder voice, but they don’t all have complete agreement on where they want to go, which is creating a lot of challenges, said Tracy.
Things like how to get 50 Gbit/s through a connector, signal integrity and reach are all still relevant but there is less agreement on ideas like mechanical form factors and system architecture like orthogonal versus backplane, Tracy explained. “It’s really a ‘fun’ time where the suppliers, equipment developers and end users are having a lot of intense discussions on how to do all of this because the industry only has x amount of development bandwidth or capacity.”
“This 50 Gig is a true inflection point and at the same time we’re also just starting to hear a whisper about how we are going to do 100 Gig,” said Tracy. "This includes the needs, drivers, timelines and technical feasibility of making the leap to 100 Gbit/s signaling even though we’re not even shipping anything at 50 Gbit/s. The technical challenges are so daunting.”
Two of the biggest questions at 100 Gbit/s data rates, said connector manufacturers, is will it all go to optical or will copper still play a role and be cost effective.
“TE absolutely thinks copper will play at 100 Gbit/s but the questions are - how far into the box and out of the box; what reaches are we going to achieve, and what magic is the silicon and signal processing communities going to bring to enable that copper to still work,” said Tracy. “They do a lot of the magic in terms of finding ways to pull the signal out of the noise when they are being used at these higher and higher data rates.”
At these faster data rates – 25 Gbit/s, 50 Gbit/s and higher – it becomes a whole new ball game in the design and supply chain, requiring closer relationships. This includes connector manufacturers partnering with their raw materials suppliers and silicon makers to take advantage and leverage their technologies and expertise. It also requires tighter relationships with customers to help them design and select the right interconnect systems for their applications.
Connector manufacturers are up to the task. Suppliers like Amphenol High Speed and TE Connectivity, continue to evolve in terms of how they work with their customers and supply chain partners. Today, many of the leading connector manufacturers work with their customer’s system development teams, while collaborating with their raw materials suppliers and silicon makers to understand how these materials will affect the connector system.
In fact, TE Connectivity developed an entire team around the concept of helping system developers with their designs. TE’s System Architecture team is a group of engineers that have cross-functional skills that include power distribution, signal integrity, mechanical engineering, and thermal issues.
“We are partners with our customers now,” said Tracy. “It’s a new world. People aren’t simply going to a website and pulling a part number off of our website. It’s more of a collaborative environment than just a pure sales environment.”
“When a concept for a new piece of equipment is started at one of our customers it is very typical that we come in with a team of power distribution, signal integrity, mechanical and thermal engineers,” explained Tracy. “We roll up our sleeves and work with them on a partner basis to select the technologies that will enable the product attributes that they are trying to deliver to some cloud-scale company.”
Tracy and his team works with customers to develop multiple concepts as well as perform trade-off analysis and prototyping to help them start their equipment design. “Here they agree on what type of I/O ports they are going to use; the type of backplane structure; the concept for how power is going to be distributed; and what the interface is going to be,” said Tracy.
But the equipment customer never just ships one model or version, they come out with platforms that address the enterprise, SMBs and cloud. “All of the different part numbers and models they ship – those are all populated by a secondary team within our customer.”
This is where the distribution channel plays a big role – in terms of pricing and availability. “They are going to look for that TE part number within distribution and bring those in-house,” Tracy said.
The distribution channel addresses lead times and pricing issues by being involved in inventory and keeping the right parts in stock, he added. “We have very tight relationships with our distribution network to make sure that as we develop new technologies they know new products are coming and they are putting stocking packages in place.”
This is all good news for buyers. It means stable lead times, typically in the four to eight-week range. And thanks to distribution partnerships, new products and technologies should be in the inventory pipeline ready to ship.
See related article: High-Speed Connectors: Around the Clock Design