Internet players invest $30b in physical Internet

‘Pure’ Internet companies invest on physical networks, facilities and equipment


Internet players invest over $30 billion annually in physical networks, facilities and equipment, and nearly $100 billion between 2011 and 2013, according to a new study from Analysys Mason.

It is the first time this investment has been captured in a comprehensive way, and highlights how Internet players are now major contributors to the fabric of the Internet. This includes data centres, submarine cables and the multitude of servers that store, process and serve content to end users.

Companies highlighted in the study include ‘pure’ online companies such as Spotify, Google or Facebook, as well as online businesses of multi-platform players such as the BBC or the New York Times.

Europe is the largest destination for this investment: over a third, amounting to $10 billion annually, goes into European networks and facilities. Many international cables meet in Europe. It hosts the world’s largest IXPs, and has a large population of Internet users. As a result, it is attracting investment by US companies, especially in data centre facilities, as well as investment by local Internet players such as Spotify and the BBC.

“Internet players are already putting big money on the table - and into the ground and under the sea. They are getting into increasingly large partnerships with investors and telecom operators. That comes in addition to investment in their core business of content and software.” said David Abecassis and Andrew Kloeden, co-authors of the report. The report was commissioned by Google. 

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