The Rise and Evolution of Clouds and Private Networks – Internet Interconnection, Ecosystem Fragmentation

The emergence and growth of a collection of large and global private networks operated by big tech companies like Google, Facebook, or Amazon have thoroughly disrupted the Internet ecosystem. While these developments have shifted and blurred the lines between public and private networking, they have contributed to a seismic shift in the topology and industrial organization of the Internet ecosystem. In this paper, we examine the growing complexity and evolution of the Internet ecosystem and analyze the causes, drivers, and implications of fractures and fragmentation from a multidisciplinary perspective. We synthesize our findings into a typology of different dimensions of fractures and fragmentations: 1) the geographical and virtual dimension, which captures the localization of network traffic and network resources and the implications of a one-hop or zero-hop Internet; 2) the open/public versus closed/private dimensions, which captures trends of vertical integration and different approaches for ownership, openness, and governance; 3) the traffic and capacity isolation dimension, which captures the relevance of slicing shared communication network and networked computing resources to fulfill performance and security demands in a purpose-specific fashion. Our findings provide insights into the complex and evolving web of vertical and horizontal relationships such as collaborations or integration strategies, complementarities, and synergies, as well as altered ownership and governance structures, hierarchies, and market positions. These insights provide evidence to inform policymaking in various current matters such as network neutrality regulation, data governance and sovereignty, and the regulation of big tech