Fierce Networks recently reported that on the earnings call for the first quarter of this year, CEO Justin Hotard of Nokia said that machine-to-machine (M2M) Internet traffic will explode, and in a few years will become the largest source of data transmitted across the Internet. He said that about 20% of all network traffic today, about 80 exabytes, comes from machine-to-machine traffic, and that alone is big news. Nokia is betting its future growth will come from meeting this growing demand.

I went back and looked at older blogs, and in 2020, there were estimates that between 3% and 5% of Internet traffic came from machine-to-machine traffic. In 2020, it was estimated that video streaming accounted for 80% of the traffic on the Internet. I remember a lot of discussion around the industry at that time asking why we were spending so much money to expand broadband networks to support entertainment.

How did M2M traffic grow to be such a big part of the Internet today? There are a lot of different sources of M2M traffic, a few that should be familiar to most of us, but some that are not obvious:

• Software Driven Usage. Compared to 2020, much of the software we use in homes and businesses has moved to the cloud. It’s not M2M traffic when you save a Word file in the cloud, but it is M2M traffic when the software you use communicates with the cloud behind the scenes.
• Internet of Things. Consumer Affairs recently estimated that the average U.S. home now has 21 connected devices. That’s double the number of average devices from 2020. A large percentage of these devices transmit data to the cloud without the homeowner’s knowledge.
• Industrial IoT. Businesses are a big source of M2M traffic. This includes video surveillance cameras and burglar alarms. It includes sensors of many kinds. Industrial IoT includes traffic involved with reading RFID tags, barcodes, and robotic scanners to track inventory and materials.
• Automative. I think most people would be amazed at the large amounts of data transmitted from your vehicle if you have it connected to your home WiFi. This includes monitoring the sensors in the car as well as transmitting performance statistics every time you drive the car.
• Healthcare Monitoring. There is a growing use of health monitors that track devices like pacemakers and glucose monitors. Patients are routinely being monitored after having medical procedures.

While the traffic from all of these sources is growing, the huge M2M growth predicted by Nokia will largely be driven by the use of AI. AI is currently driving a huge amount of new traffic. A lot of it is coming from AI datacenters that communicate with each other. There is also huge traffic growth coming on the edge from uses like AI-driven factories and other industrial uses that are using software to replace people.

Nokia sees its own growth coming from supplying the gear needed to provide faster transmission speeds on long-haul fiber and keeping up with the growth to power the growing number of long-haul fiber routes being built. Nokia also expects to see growth at the edge as the need to be able to process huge amounts of M2M traffic keeps increasing.

Interestingly, there is a big push among the companies that operate data centers to create a parallel long-haul network that segregates AI traffic from everything else. This is being done to improve latency by eliminating contention with other traffic and by eliminating intermediate traffic switching points. Data centers also want to use fiber routes with the fastest speeds and largest capacity.