Internet upgrade part of a move towards 400/800G connectivity

The industry transition to 400 Gigabit Ethernet networking took a big step forward this week when the world’s leading Internet exchange operator announced plans to upgrade its New York backbone to 400G. DE-CIX selected Nokia for the project, which will also add 800G readiness to DE-CIX New York, the largest IX in the US northeast region.

The 400G upgrade should be completed by around June, according to DE-CIX CTO Thomas King.

“It will allow us to support more customers,” he says. “Bandwidth is growing 20% per year and we want to make sure we can support that for our customers.”

The upgrade will also allow the company to ensure that there’s a sufficient safety margin when it comes to its capacity.

“We usually run our infrastructure at 65% of maximum at peak times, so even if there’s a surge, we want to make sure we have enough,” he says.

Another driver is the fact that individual data centers themselves are upgrading to 400G Ethernet.

The previous capacity of the DE-CIX network was 100G, which means that data centers running at 400G need to split the signal.

“Now you can take that signal and just carry it through and that’s why there’s an efficiency there,” says Jimmy Yu, an analyst at the Dell’Oro Group.

According to Yu, the install base of 400G is currently growing at 33% a year and most data centers have begun making the shift.

Nearly 80% of switch ports shipped to hyperscalers in 2024 were 200 or 400 Gigabits per second, according to Dell’Oro’s latest data, says Dell’Oro vice president Sameh Boujelbene, with some beginning the transition to 800 Gbps. For the rest of the market, including tier two and three cloud service providers and enterprises, 80% of shipments remained at 100 Gpbs.

“The whole AI thing is driving the 800G upgrade cycle,” says Yu.

The growth of AI — and data traffic in general — is also reflected outside the data centers in global Internet traffic.

According to Yu, Internet traffic has historically been growing at about 30% per year, but that might change soon. Companies are spending money on AI data center clusters, which need to be connected to each other.

“So it should grow higher than 30%,” he says “But we don’t truly know what it will be — there’s a lot of speculation at this point.”

Meanwhile, higher connection speeds always have a positive impact on companies and on customer satisfaction, he adds.

“Moving to 400 Gigabit Ethernet and 400 optical wavelengths is a very positive move for DE-CIX and when they start shifting to 800 that will be even better,” he says.

In January, DE-CIX reported record high data traffic in 2024, reaching 68 exabytes — a 15% increase compared to 2023 and more than double the volume since 2020.

DE-CIX currently connects more than 3,400 networks via its global Internet exchanges.

In addition to adding capacity, DE-CIX is also upgrading the resilience, visibility and security of its networks, says King.

“If there’s a glitch or hiccup — or fiber gets hit by construction — we can easily reroute so that customers don’t experience that hiccup,” he tells Network World. “They don’t even see it. It increases the reliability of the infrastructure.”

A reliable, high-speed connection is a must for many of today’s top applications, such as video conferencing, as well as new technologies coming down the line, like self-driving cars.

DE-CIX currently has a four-nines uptime rate — 99.9999%. “We didn’t have any major outages in the past couple of years,” King says. “Of course, we do maintenance but we try to keep that to a minimum for our customers and they’re informed so they can plan ahead. We know how to run resilient infrastructure.”

With availability already at close to 100%, he doesn’t expect that number to increase. “But we want to assure our customers that we use the latest technology to push that boundary even further and have more redundancy built in if something happens,” he says.

“The services are getting more and more important for enterprises of all sorts,” he adds, “not only digital enterprises but also enterprises in the traditional economy are relying more and more on digital services.”

Better connectivity helps enterprises better serve customers, and also improves internal operations.

“The biggest savings for them is they get fewer support tickets to their IT help desk,” he says. “That’s a big money saver for them.”

DE-CIX is also upgrading security and usability of its systems, he says.

For example, earlier this year, the company added two-factor authentication for customer portals.

These portals offer customers a great deal of control over their connections, including configuration changes.

“It’s powerful, so we want to make sure that only the right persons can log in to change the infrastructure,” he says.

Customers can also use the portals to see how the network is behaving, whether they’re experiencing issues, where traffic is coming from and where it’s going.

“We provide very detailed insights,” King says.

And larger customers who are moving into network automation can access these systems via APIs.

“All the services that we provide customers come with APIs,” King says. “We have customers using that to the extent that there isn’t a human — just a computer interacting with the API calls to interact with the network infrastructure.”

For example, if a company backs up all their data once a month, they can add infrastructure for a short period of time and then remove it when they’re not using it anymore, he says.

DE-CIX customers include not only individual enterprises, but also data center providers and all the major hyperscalers — AWS, Azure, GCP, as well as IBM Cloud and Oracle Cloud — as well as many niche cloud providers. The company has more than 3,000 customers globally, he says.

DE-CIX is a neutral exchange, meaning that it’s not owned by any particular data center provider or carrier, meaning that it can connect different data centers from different operators.

According to an October report by Dstream Group, conducted on behalf of DE-CIX, neutral exchanges now represent 80% of US exchanges, a sign that enterprises increasingly value flexibility in their network architectures.