I saw a quote recently from Jeff Finkelstein, the chief of the networks at Cox Communications, who said that the data demand on his networks was growing at 53% per year. I would hope that the managers of most large networks can cite their growth statistics.

There has been a metric in the industry that residential data usage has been doubling about every three years. This metric has roughly held true since the early dial-up days. Year after year people download more than they have the year before.

But it’s easy for us to lose sight that the bandwidth that people and businesses use for getting to the web is only a piece of the bandwidth usage on an ISP network. There are two other big uses of the networks that are growing faster than Web usage. We are seeing the first real growth in traffic from the Internet of Things, but the fastest growing contributor to web traffic right now is machine-to-machine (M2M) traffic.

M2M is when devices talk to each other. One example would be programs that automatically back up things to the cloud. PCs and cellphones now routinely send data to and from the cloud without any specific action by the user. The proliferation of storing data and using programs in the cloud has exploded the M2M usage.

The expected increase in M2M traffic is staggering as more and more things move into the cloud. In 2015 so far the average M2M traffic worldwide is about 50 terabytes per month. By 2018 that is expected to grow to over 900 terabytes per month. And while IoT traffic is relatively small right now, it is starting to grow rapidly as well.

Finkelstein says that the only way for his company to keep up with this fast growth is through the use of software defined networks (SDN). Cox uses SDN today to identify segments of traffic to route everything as efficiently as possible. He says that the company can isolate things like children’s traffic from parent’s traffic from business traffic and route each differently.

Just a few years ago there was a proliferation of peering arrangements established at companies like Cox. They created direct peering connections with companies like Google. But peering is getting more complicated and the goal for a large company is to peer with the major clouds – the Google cloud, the Amazon cloud, the Microsoft cloud etc. And that is where SDN comes into play to help route traffic as efficiently as possible to save on transport costs and to cut down on latency.

What this means for the small ISP is that the rate of growth of overall data traffic is accelerating. The 53% annual growth number would have seemed like an unbelievable number five years ago. For anybody not preparing properly the effects of that level of exponential growth can catch up to any network in a hurry. If Cox’s 53% growth is sustained they will have 5.5 times more traffic five years from now than they have today.

I don’t know how many network operators are planning ahead for that kind of growth. Certainly every network is seeing growth even if it’s not at quite the speed Cox is seeing. Traffic on rural networks is probably not growing quite as quickly as the Cox network, but it is still growing rapidly.

The major issue for most network owners will be to keep an eye on the various choke points in your network to understand where more data is going to cause you problems in the near future. Choke points can exist at many different places in the network from the backbone data pipes down to neighborhood nodes. And keeping all parts of your network  ahead of demand is going to require capital spending to upgrade electronics.