Internet Futures. My Aim: share some thoughts about the Internet and its future think about some of the major factors that will shape our future +

Internet Futures

My Aim:

share some thoughts about the Internet and its future

think about some of the major factors that will shape our future

+

Why? The mainstream telecommunications industry has a rich history

Why? The mainstream telecommunications industry has a rich history

…of making very poor technology guesses

Why? The mainstream telecommunications industry has a rich history

…of making very poor technology guesses

and regularly being taken bysurprise!

Can the Internetdo a better jobof matchingtechnology touser needs?

One approach:

1. Observe the situation and what’s happening

One approach:

1. Observe the situation and what’s happening

3. Understand where this may lead us and what options may be presented on the way

One approach:

1. Observe the situation and what’s happening

2. Believe what we see

3. Understand where this may lead us and what options may be presented on the way

(the most dif

ficult o

ne!)

What’s Happening Today:User Preferences and the

Market for Services

What’s Happening Today:User Preferences and the

Market for Services

From radio to tv to ?

What’s Happening Today:User Preferences and the

Market for Services

From radio to tv to ?

What’s Happening Today:User Preferences and the

Market for Services

passiv

active

From radio to tv to ?

passive

What’s Happening Today:User Preferences and the

Market for Services

passiv

activeYouT ube

From radio to tv to ?

From telephony to chat to mashups to p2p to ?

passive

Service Profile Choices

open vswalled

garden

Service Profile Choices

open vswalled

garden Bundled servicesOpen collaboration

framework

Service Profile Choices

open vswalled

garden Bundled servicesOpen collaboration

framework

open delivery infrastructure vs Service / content

distribution networks

Service Profile Choices

open vswalled

garden Bundled servicesOpen collaboration

framework

Vertical integration

rolespecializatio

n

open delivery infrastructure vs Service / content

distribution networks

Service Profile Choices

open vswalled

garden Bundled servicesOpen collaboration

framework

Vertical integration

rolespecializatio

n

open delivery infrastructure vs Service / content

distribution networks

userproduced vs

externallyproduced

Service Profile Choices

open vswalled

garden Bundled servicesOpen collaboration

framework

Vertical integration

rolespecializatio

n

Passive usersActive usernetworks

open delivery infrastructure vs Service / content

distribution networks

userproduced vs

externallyproduced

What’s Happening Today:User Preferences and the

Market for Services

passiv

activeYouT ube

From radio to tv to ?

From telephony to chat to mashups to p2p to ?

passive

Today’s users have already clearlydemonstrated their preference foran active service profile based on sharing

What’s Happening Today:Demand for Bandwidth

1995

Kb Modem tailsMb Muxed Trunks

What mass market customers want for $25 per month !

What’s Happening Today:Demand for Bandwidth

1995 2005

Kb

Mb

Modem tailsMb Muxed Trunks

DSL tailsGb Lamda Trunks

What mass market customers want for $25 per month !

What’s Happening Today:Demand for Bandwidth

1995 2005 2015

Kb

Mb

Gb

Modem tailsMb Muxed Trunks

DSL tailsGb Lamda Trunks

fibre tailsBonded Tb Trunks?

What mass market customers want for $25 per month !

What form

of infra

structu

re investm

ent

profile can deliv

er this o

utcome

in 7 years tim

e?

What’s Happening Today:Declining Revenue Profile

for incumbent telcos

What’s Happening Today:Declining Revenue Profile

for incumbent telcos

How to fill the gap of theInternet’s revenue leak?

Usage

B u s in e s s

driverdimensions

++

‘’

empowered userspenetration

?

technology

surplus

enabling windows

++

Moore’s Lawtechnology pace

rapid infill

technology

surplus

enabling windows

? see it ...... seize it !

++

Moore’s Lawtechnology pace

rapid infill

technology++

networkshared

shift

ofpower

end usercapability

technology push and network architecture

technology

new productionparadigms

netw a network- service‘ ‘produced outside

o f the network‘ ‘

“Over the top”applications

++

Content production is a commodity application that users sustain through sharing, rather than a valuable service

that is produced externally through dedicated specialized production

channels

Content production is a commodity application that users sustain through sharing, rather than a valuable service

that is produced externally through dedicated specialized production

channels

technology

netw

a network- service‘ ‘produced outside

o f the network‘ ‘

“Over the top”applications

new productionparadigms

++

technology

surplus enablesdivergence

forsimplicityperformance

and

++

technology

QoS

Network VPNs

IMSsurplus enablesdivergencefor

simplicityperformance

and

++

technology

no need fo rIP- convergence

QoS

Network VPNs

IMSsurplus enablesdivergencefor

simplicityperformance

and

++

technology

no need fo rIP- convergence

Web 2.0 enabled user generatedcontent

QoS

Network VPNs

IMS

facebookdoppler youtube

wikipediagoogle

flickr

surplus enablesdivergencefor

simplicityperformance

and

++

technology++

tensions at the lower levels of the technology stack

Users simply want applications to work

Network operators often base their business model on driving complexity into the network

So who really wants a simpleend-to-end IP network?

And who is willing to payFor it?

IPv4

IPv4 NAT landIPv6?

usage

fuelling the usage growth fire

usage = scaling

usage

fuelling the usage growth fire

bandwidthswitching

routingaddressing

usage = scaling

storagedelivering

powerheat dissipationmemory speed

silicon density

storage efficiency

Please send heaps more….

fibre routes

Businessmodelling

is challenging when today’s businesses appear to have radically different ideas of what this business is all about

?

Businessmodelling

and very few of these ideas will be right!

?

is challenging when today’s businesses appear to have radically different ideas of what this business is all about

Businessmodelling

And some of these ideas appear to be just plain wrongeven now!

?

and very few of these ideas will be right!

is challenging when today’s businesses appear to have radically different ideas of what this business is all about

..today operatorstend to be veryhype driven ..

Businessmodelling

And some of these ideas appear to be just plain wrong!

?

and very few of these ideas will be right!

is challenging when today’s businesses appear to have radically different ideas of what this business is all about

..today operatorstend to be veryhype driven ..

convergence

NGN - . . . triple play

seamless networking

Businessmodelling

?

..today operatorstend to be veryhype driven ..

convergence

NGN - . . .

Everone is talkingabout it

triple play

seamless networking

Businessmodelling

?

..today operatorstend to be veryhype driven ..

convergence

NGN - . . .

Everone is talkingabout it

Fewhave actualexperience

triple play

seamless networking

Businessmodelling

?

..today operatorstend to be veryhype driven ..

convergence

NGN - . . .

Everone is talkingabout it

Fewhave actualexperience

.. andthe actualexperiences aremostly failures

triple play

seamless networking

Businessmodelling

?

Businessmodelling

Packet pushing is a commodity utility activity

Low margins

No product differentiation

Low barriers to entry

Deregulation and competitionValued services are overlays to the network

?

What are we learning?

Businessmodelling

Packet pushing is a commodity utility activity

Low margins

No product differentiation

Low barriers to entry

Deregulation and competition

Traditional revenue streams are vaporizingWired telephony Business data products

Mobile telephonyLocal Accessmonopolies

Valued services are overlays to the network

?

What are we learning?

Packet pushing is a commodity utility activity

Low margins

No product differentiation

Low barriers to entry

Deregulation and competition

Traditional revenue streams are vaporizingWired telephony Business data products

Mobile telephonyLocal Accessmonopolies

Investors are still nervous about telcos

Cost of capital is high

Shareholder returns need to stay highConsumers are fleeing legacy telcos in the face of price gouging

No residual expertise left in-house

Valued services are overlays to the network

Businessmodelling

?

What are we learning?

Businessmodelling

?

Informed decision making about network infrastructure investment is the key to the next few years!

Poor network investment choices will lead to business failures

Those who are prepared to questionthe hype and construct their networks in a way that supports user needs will emerge as stronger ISP players

So where arewe heading ?

My personal view sees the following..

T echno logy Business

Usage

?

.. involving users and other stake-holders

with differentrelationships

new roles being defined

?++

‘’

empowered userspenetration

So where arewe heading

My personal view sees the following..

So where arewe heading ?

commodity utilitynetwork operation

high capacitypacket pushing

network

My personal view sees the following..

So where arewe heading

user - drive, productionp2p,content, ..

?

commodity utilitynetwork operation

User-centric applications,not network-centric services

Value shift upthe protocol stack

high capacitypacket pushing

My personal view sees the following..

network

So where arewe heading

user - drive, productionp2p,content, ..

involving userspartners

?

Reinvention:

new

and different business models

commodity utilitynetwork operation

User-centric applications,not network-centric services

Value shift upthe protocol stack

network

high capacitypacket pushing

My personal view sees the following..

opportunities will arise with

a closing thought …

I’m probably going to be proved wrong as much as I may be right with these thoughts. There is no certain track of progress here.

Each shift of the Internet’s use paradigm through innovation is as much a surprise to the innovator as it is to everyone else.

Which is probably a very good thing!

Thank You!

Geoff Hustongih@apnic.net