The Ladder: How money and multiplexing are connected
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How the money and multiplexing are connected in telecoms businesses
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The Ladder: How money and multiplexing are connected
- 1. The Ladder How money is connected to multiplexing Dr Neil Davies Predictable Network Solutions Ltd Peter Thompson Predictable Network Solutions Ltd Martin Geddes Martin Geddes Consulting Ltd PREDICTABLE NETWORK SOLUTIONS © 2013 All Rights Reserved
- 2. Dr Neil Davies Co-founder, Predictable Network Solutions Ltd Peter Thompson CTO, Predictable Network Solutions Ltd Martin Geddes Founder, Martin Geddes Consulting Ltd PREDICTABLE NETWORK SOLUTIONS
- 3. The only ex ante network performance engineering company in the world. Consultancy on the future of telecoms and the Internet. PREDICTABLE NETWORK SOLUTIONS
- 4. PREDICTABLE NETWORK SOLUTIONS Sustainable Broadband Economics Workshop London, 22nd May 2013 Fundamentals of Network Performance Workshop London, 24th May 2013 www.sustainablebroadband.com
- 9. COSTS REVENUE REQUIRES ENABLES It is a chain of reasoning Each ‘rung’ enables the one above… …and requires the one below ENABLES REQUIRES
- 11. COSTS REVENUE REQUIRES ENABLES It helps us to answer the question: How can the network operator maximise profits? - +
- 12. COSTS REVENUE REQUIRES ENABLES Why care? Failure to understand and exploit these simple causal relationships creates enormous waste and missed revenue opportunities
- 14. REVENUE What causes users to pay network operators?
- 15. REVENUE Network users can have good experiences or bad experiences FIT-FOR-PURPOSE EXPERIENCE
- 16. REVENUE Revenue is a result of delivering fit-for-purpose experiences FIT-FOR-PURPOSE EXPERIENCE
- 18. REVENUE Good experiences sufficiently common + Bad experiences sufficiently rare FIT-FOR-PURPOSE EXPERIENCE
- 19. REVENUE OUTCOMES FIT-FOR-PURPOSE EXPERIENCE View a web page, watch a video, download an e-book: Those experiences are outcomes of computation.
- 20. REVENUE OUTCOMES FIT-FOR-PURPOSE EXPERIENCE Outcomes Examples of good outcomes: watch a movie, talk to your granny Examples of bad outcomes: ‘circle of death’, poor voice quality
- 21. REVENUE FLOWS OUTCOMES FIT-FOR-PURPOSE EXPERIENCE Flows Computational outputs require data inputs! A network delivers individual and aggregate flows of packets to enable this computation
- 22. REVENUE FLOWS OUTCOMES FIT-FOR-PURPOSE EXPERIENCE Flows Good outcomes: Require flows with bounded packet loss and delay Bad outcomes: Experience flows with excessive packet loss or delay
- 24. REVENUE FLOWS OUTCOMES FIT-FOR-PURPOSE EXPERIENCE Demand • Highly heterogeneous • Has strong internal couplings
- 26. COSTS TIN Tin Any physical substrate Spectrum, fibre, copper, ducts, street cabinets, cell towers, and the (unpowered) transmission and routing equipment
- 27. COSTS MECHANISMS TIN Mechanisms Active data links, operating queues in routers, radio network controllers
- 28. COSTS MECHANISMS TRANSMISSION TIN Transmission The complete system for moving data from A to B Transmission is what the network does rather than what it is
- 30. COSTS MECHANISMS TRANSMISSION TIN Microseconds Minutes Months Timescales We can create and reallocate supply at different timescales
- 31. COSTS MECHANISMS TRANSMISSION TIN Supply Scales together: extra resources at one level need more of everything below
- 32. COSTS REVENUE MULTIPLEXING Multiplexing How are costs and revenues connected?
- 33. COSTS REVENUE MULTIPLEXING Multiplexing This is where supply and demand meet
- 37. What is multiplexing? Over-simplification ahead (many important statistical issues omitted)
- 38. Simplest case
- 39. A B C D Visualising multiplexing Input data flows Before
- 40. A B C D Visualising multiplexing Input data flows TransmitMux Before
- 41. A B C D Visualising multiplexing A B C D Input data flows TransmitMux Demux Output data flows Before After
- 42. A B C D Packets get lost A B C D Before After LOSS
- 43. A B C D Packets get delayed A B C D Before After DELAY
- 44. A B C D Quality of Experience (QoE) failures A B C D Before After QoE FAILURE Bad experiences are caused by excessive loss and delay
- 45. A B C D Visualising multiplexing A B C D Before After DEMAND SUPPLY SUPPLYDEMAND
- 46. A B C D We have (scheduling) choices! A B C D Before After What to lose? What to delay (and by how much)? How to avoid QoE failures?
- 49. COSTS REVENUE CONSUMER PRODUCER TRADER Option trading space (Advanced class only! More information in our workshops…) + - Danger! Advanced mathematics ahead!
- 50. COSTS REVENUE MULTIPLEXING A statistical process – like a game of chance
- 51. How does this game of chance work?
- 53. Bad coincidences cause experiences
- 54. More network use and users make bad coincidences more likely
- 56. Capacity demand LOW HIGH MULTIPLEXING Feasible Infeasible MAX CAPACITY
- 57. Risk of bad coincidences LOW HIGH MULTIPLEXING Increases with load
- 61. Resource efficiency Flowefficiency LOW HIGH LOW HIGH MULTIPLEXING Strong flow isolation = Happy users High stat mux gain = Happy operator
- 63. Resource efficiency Flowefficiency LOW HIGH LOW HIGH Feels to users like the network is empty, even when it is full! MULTIPLEXING HEAVEN
- 64. Resource efficiency Flowefficiency LOW HIGH LOW HIGH Requires lots and lots of good coincidences & very few bad coincidences MULTIPLEXING HEAVEN
- 65. Resource efficiency Flowefficiency LOW HIGH LOW HIGH MULTIPLEXING HEAVEN By tipping the odds through effective scheduling
- 66. COSTS REVENUE MULTIPLEXING Success Depends on how well you do this scheduling • Affects user fitness- for-purpose and QoE hazards… • …as well as tin required and cost hazards… • …and thus profit and risk
- 67. COSTS REVENUE MULTIPLEXING Failure Poor flow isolation (too many bad coincidences) Poor resource usage (too much over-provisioning or unused capacity) £
- 68. COSTS REVENUE MULTIPLEXING Predictability Can only play the game of chance if you know the odds. If you don’t know the odds, or they keep changing as you play, then you lose!
- 71. ANY NETWORK SERVICE VALUE IN USE The customer doesn’t care about operator revenue They seek value-in-use
- 72. ANY NETWORK SERVICE VALUE IN USE FIT-FOR-PURPOSE EXPERIENCE Effective Task Substitution Value-in-use comes from substituting for another task that has higher costs and/or lower benefits. Fitness-for-purpose is when this substitution occurs.
- 73. COSTS ANY NETWORK SERVICEVALUE IN USE CUSTOMERDOMAIN SERVICEOPERATORDOMAIN Two perspectives • Customer • Service operator
- 74. ANY NETWORK SERVICEVALUE IN USE CUSTOMERDOMAIN SERVICEOPERATORDOMAIN Two perspectives They don’t concern themselves about the same things
- 75. ANY NETWORK SERVICEVALUE IN USE CUSTOMERDOMAIN SERVICEOPERATORDOMAIN FLOWS BENEFIT KEY PAYMENT Benefits • Payment is typically for data flows across the network • This is at a different logical level to what the customer values
- 77. COSTS ANY NETWORK SERVICEVALUE IN USE PAYMENT CUSTOMERDOMAIN SERVICEOPERATORDOMAIN FLOWS OUTCOMES FIT-FOR-PURPOSE EXPERIENCE MULTIPLEXING MECHANISMS TRANSMISSION TIN COST KEY PAYMENT User costs
- 78. CAPEX FOR EVERY ASSET ANY NETWORK SERVICEVALUE IN USE CUSTOMERDOMAIN SERVICEOPERATORDOMAIN FLOWS OUTCOMES FIT-FOR-PURPOSE EXPERIENCE MULTIPLEXING MECHANISMS TRANSMISSION TIN KEY PAYMENT Capex Scales according to how much tin is required Halving the scheduling efficiency doubles your capex! COST PAYMENT
- 79. CAPEX FOR EVERY ASSET ANY NETWORK SERVICEVALUE IN USE OPEX FOR EVERY ACTIVITY PAYMENT CUSTOMERDOMAIN SERVICEOPERATORDOMAIN FLOWS OUTCOMES FIT-FOR-PURPOSE EXPERIENCE MULTIPLEXING MECHANISMS TRANSMISSION TIN COST KEY PAYMENT Opex
- 81. CAPEX FOR EVERY ASSET ANY NETWORK SERVICEVALUE IN USE OPEX FOR EVERY ACTIVITY PAYMENT CUSTOMERDOMAIN SERVICEOPERATORDOMAIN FLOWS OUTCOMES FIT-FOR-PURPOSE EXPERIENCE MULTIPLEXING MECHANISMS TRANSMISSION TIN PAYMENT Hazards Things can (and do) go wrong BENEFIT COST KEY HAZARD
- 82. CAPEX FOR EVERY ASSET ANY NETWORK SERVICEVALUE IN USE OPEX FOR EVERY ACTIVITY PLAN B FAILURE PAYMENT CUSTOMERDOMAIN SERVICEOPERATORDOMAIN FLOWS OUTCOMES FIT-FOR-PURPOSE EXPERIENCE MULTIPLEXING MECHANISMS TRANSMISSION TIN PAYMENT BENEFIT COST KEY HAZARD Hazards The Customer experiences QoE failures & must insure against excess risk
- 83. CAPEX FOR EVERY ASSET ANY NETWORK SERVICEVALUE IN USE OPEX FOR EVERY ACTIVITY PLAN B FAILURE PAYMENT CUSTOMERDOMAIN SERVICEOPERATORDOMAIN FLOWS OUTCOMES FIT-FOR-PURPOSE EXPERIENCE MULTIPLEXING MECHANISMS TRANSMISSION TIN PAYMENT Hazards The network operator has SLAs & may require unplanned capacity upgrades CAPACITY BENEFIT COST KEY HAZARD REFUND
- 84. CAPEX FOR EVERY ASSET ANY NETWORK SERVICEVALUE IN USE OPEX FOR EVERY ACTIVITY PLAN B FAILURE PAYMENT CUSTOMERDOMAIN SERVICEOPERATORDOMAIN FLOWS OUTCOMES FIT-FOR-PURPOSE EXPERIENCE MULTIPLEXING MECHANISMS TRANSMISSION TIN PAYMENT Hazards The size of the hazards are all directly related to how well we do the multiplexing Our experience is that these hazards are poorly modelled in broadband networks (if at all) CAPACITY BENEFIT COST KEY HAZARD REFUND
- 86. COSTS REVENUE How well are network operators playing the game of chance?
- 87. CAPEX FOR EVERY ASSET TELEPHONY SERVICEVALUE IN USE OPEX FOR EVERY ACTIVITY TRAVEL TO LONDON FAILED CALL CALL CHARGE CUSTOMERDOMAIN NETWORKOPERATORDOMAIN FLOWS OUTCOMES FIT-FOR-PURPOSE EXPERIENCE MULTIPLEXING MECHANISMS TRANSMISSION TIN CALL CHARGE BENEFIT COST KEY HAZARD REFUND Fixed Telephony Costs and revenues in balance Hazards well contained and managed Life used to be simple and good…
- 88. But then we changed… Time-division multiplexed circuits Packet-based statistical multiplexing Complete phase and flow isolation Weak phase and flow isolation TELEPHONY BROADBAND Game of chance was easy Game of chance is hard
- 89. Resource efficiency Flowefficiency LOW HIGH LOW HIGH TDM (core) MULTIPLEXING TDM (edge) TDM for voice had highly- utilised network cores, and low peak-to-mean at the network edge
- 90. Resource efficiency Flowefficiency LOW HIGH LOW HIGH MULTIPLEXING TDM For bursty data, TDM is highly inefficient, even if it is very effective
- 91. Resource efficiency Flowefficiency LOW HIGH LOW HIGH IP (core) MULTIPLEXING IP is both efficient and effective in the core for many kinds of data
- 92. Resource efficiency Flowefficiency LOW HIGH LOW HIGH IP (access network) MULTIPLEXING However, IP is much weaker at the network edge. Why is this?
- 93. Resource efficiency Flowefficiency LOW HIGH LOW HIGH IP (access network) MULTIPLEXING HEAVEN
- 94. Resource efficiency Flowefficiency LOW MEDIUM LOW HIGH MULTIPLEXING HIGH IP (access network) HEAVENHEAVEN Heaven gets further away
- 95. Resource efficiency Flowefficiency LOW MEDIUM LOW HIGH MULTIPLEXING HIGH IP (access network) Ineffective scheduling forces reliance on over-provisioning (to try to make bad coincidences rare) - which has diminishing returns HEAVENHEAVEN
- 96. Resource efficiency Flowefficiency LOW MEDIUM LOW HIGH MULTIPLEXING HIGH Current approaches are infeasible to schedule at high load IP (access network)
- 97. Resource efficiency Flowefficiency LOW MEDIUM LOW HIGH MULTIPLEXING HIGH IP (access network) Network collapses
- 98. We want to know! Are network operators delivering fitness- for-purpose and good outcomes
- 99. We want to know!
- 100. CAPEX FOR EVERY ASSET INTERNET SERVICE PROVIDERVALUE IN USE CUSTOMERDOMAIN NETWORKOPERATORDOMAIN FLOWS OUTCOMES MULTIPLEXING MECHANISMS TRANSMISSION TIN FIT-FOR-PURPOSE EXPERIENCE ? Have lost visibility and control over outcomes
- 101. CAPEX FOR EVERY ASSET INTERNET SERVICE PROVIDERVALUE IN USE CUSTOMERDOMAIN NETWORKOPERATORDOMAIN FLOWS OUTCOMES MULTIPLEXING MECHANISMS TRANSMISSION TIN FIT-FOR-PURPOSE EXPERIENCE The broadband industry is delivering purpose-for- fitness, not fitness-for- purpose ?
- 102. CAPEX FOR EVERY ASSET INTERNET SERVICE PROVIDERVALUE IN USE CUSTOMERDOMAIN NETWORKOPERATORDOMAIN FLOWS OUTCOMES MULTIPLEXING MECHANISMS TRANSMISSION TIN FIT-FOR-PURPOSE EXPERIENCE Schedulability has been largely abandoned (although the issues are omnipresent)
- 103. CAPEX FOR EVERY ASSET INTERNET SERVICE PROVIDERVALUE IN USE CUSTOMERDOMAIN NETWORKOPERATORDOMAIN FLOWS OUTCOMES MULTIPLEXING MECHANISMS TRANSMISSION TIN FIT-FOR-PURPOSE EXPERIENCE At best we compete on transmission speed, which is only a weak proxy for outcomes
- 104. CAPEX FOR EVERY ASSET INTERNET SERVICE PROVIDERVALUE IN USE CUSTOMERDOMAIN NETWORKOPERATORDOMAIN FLOWS OUTCOMES MULTIPLEXING MECHANISMS TRANSMISSION TIN FIT-FOR-PURPOSE EXPERIENCE Marketing focus on mechanisms and tin (4G! Fibre! 3GPP rel 22!?!)
- 105. We want to know! Are user QoE hazards being sufficiently managed and mitigated
- 106. We want to know!
- 107. CAPEX FOR EVERY ASSET INTERNET SERVICE PROVIDERVALUE IN USE MAKE A PHONE CALL FAILED VIDEO LINK CUSTOMERDOMAIN NETWORKOPERATORDOMAIN FLOWS OUTCOMES MULTIPLEXING MECHANISMS TRANSMISSION TIN FIT-FOR-PURPOSE EXPERIENCE Lack of service assurance means users cannot depend on broadband services: creates hidden costs
- 108. We want to know! Is tin being used efficiently and effectively to deliver flows
- 109. We want to know!
- 110. LOTS OF UNNECESSARY CAPEX INTERNET SERVICE PROVIDERVALUE IN USE CUSTOMERDOMAIN NETWORKOPERATORDOMAIN FLOWS OUTCOMES MULTIPLEXING MECHANISMS TRANSMISSION TIN FIT-FOR-PURPOSE EXPERIENCE Using tin to solve what are rightly scheduling problems Huge misallocation of capital
- 111. We want to know! Are operators appropriately managing and mitigating their cost hazards
- 112. We want to know!
- 113. UNPLANNED CAPEX SPENDING INTERNET SERVICE PROVIDERVALUE IN USE CUSTOMERDOMAIN NETWORKOPERATORDOMAIN FLOWS OUTCOMES MULTIPLEXING MECHANISMS TRANSMISSION TIN FIT-FOR-PURPOSE EXPERIENCE CAPACITY Have taken on new contingent liabilities Uncosted, and not seen in balance sheet
- 115. COSTS REVENUE FLOWS OUTCOMES FIT-FOR-PURPOSE EXPERIENCE MECHANISMS TRANSMISSION TIN MULTIPLEXING Service Assurance How can we restore link to outcomes and fitness-for- purpose? Then more can be charged for reducing user QoE hazards COMPUTATIONTRANSLOCATION
- 116. COMPUTATIONTRANSLOCATION COSTS REVENUE FLOWS OUTCOMES FIT-FOR-PURPOSE EXPERIENCE MECHANISMS TRANSMISSION TIN MULTIPLEXING Quality Transport Agreements • How can we formally describe the requirements of demand and capabilities of supply? • How can we create digital supply chains?
- 117. COMPUTATIONTRANSLOCATION COSTS REVENUE FLOWS OUTCOMES FIT-FOR-PURPOSE EXPERIENCE MECHANISMS TRANSMISSION TIN Polyservice networks How can we match diversity of demand with an appropriate diversity of supply? DEMAND SUPPLY
- 118. COSTS REVENUE FLOWS OUTCOMES FIT-FOR-PURPOSE EXPERIENCE MECHANISMS TRANSMISSION TIN MULTIPLEXING Advanced Trading Spaces How can we match supply and demand at all timescales? Microseconds Minutes Months
- 119. Sustainable Broadband Economics Workshop London, 22nd May 2013 Fundamentals of Network Performance Workshop London, 24th May 2013 www.sustainablebroadband.com PREDICTABLE NETWORK SOLUTIONS
- 120. Neil Davies Neil.Davies@pnsol.com Peter Thompson Peter.Thompson@pnsol.com Martin Geddes mail@martingeddes.com PREDICTABLE NETWORK SOLUTIONS