The Ladder: How money and multiplexing are connected

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The Ladder: How money and multiplexing are connected

  1. 1. The LadderHow money is connected to multiplexingDr Neil DaviesPredictable Network Solutions LtdPeter ThompsonPredictable Network Solutions LtdMartin GeddesMartin Geddes Consulting LtdPREDICTABLENETWORKSOLUTIONS© 2013 All Rights Reserved
  2. 2. Dr Neil DaviesCo-founder, Predictable Network Solutions LtdPeter ThompsonCTO, Predictable Network Solutions LtdMartin GeddesFounder, Martin Geddes Consulting LtdPREDICTABLENETWORKSOLUTIONS
  3. 3. The only ex ante network performanceengineering company in the world.Consultancy on the future oftelecoms and the Internet.PREDICTABLENETWORKSOLUTIONS
  4. 4. PREDICTABLENETWORKSOLUTIONSSustainable Broadband Economics WorkshopLondon, 22nd May 2013Fundamentals of Network Performance WorkshopLondon, 24th May 2013www.sustainablebroadband.com
  5. 5. SetupTheLadderTheRungsTheMulti-plexingTheMoneyTheTroubleTheSolutionPREDICTABLENETWORKSOLUTIONSSubstance
  6. 6. OverviewTheLadderTheRungsTheMulti-plexingTheMoneyTheTroubleTheSolutionPREDICTABLENETWORKSOLUTIONS
  7. 7. REVENUEHow arenetworkoperatorcosts andrevenuesconnected?COSTS
  8. 8. COSTSREVENUEThe “Ladder”provides thecausal links
  9. 9. COSTSREVENUEREQUIRESENABLESIt is a chain ofreasoningEach ‘rung’ enablesthe one above……and requires theone belowENABLES REQUIRES
  10. 10. COSTSREVENUEREQUIRESENABLESHardconstraints:no escape!
  11. 11. COSTSREVENUEREQUIRESENABLESIt helps us toanswer thequestion:How can thenetwork operatormaximise profits?-+
  12. 12. COSTSREVENUEREQUIRESENABLESWhy care?Failure tounderstand andexploit these simplecausal relationshipscreatesenormouswasteandmissed revenueopportunities
  13. 13. OverviewTheLadderTheRungsTheMulti-plexingTheMoneyTheTroubleTheSolutionPREDICTABLENETWORKSOLUTIONS
  14. 14. REVENUEWhat causesusers to paynetworkoperators?
  15. 15. REVENUENetwork userscan have goodexperiencesorbadexperiencesFIT-FOR-PURPOSEEXPERIENCE
  16. 16. REVENUERevenue is aresult ofdeliveringfit-for-purposeexperiencesFIT-FOR-PURPOSEEXPERIENCE
  17. 17. REVENUEWhat is a‘fit-for-purpose’experience?FIT-FOR-PURPOSEEXPERIENCE
  18. 18. REVENUEGood experiencessufficiently common+Bad experiencessufficiently rareFIT-FOR-PURPOSEEXPERIENCE
  19. 19. REVENUEOUTCOMESFIT-FOR-PURPOSEEXPERIENCEView aweb page,watch a video,download ane-book:Thoseexperiences areoutcomes ofcomputation.
  20. 20. REVENUEOUTCOMESFIT-FOR-PURPOSEEXPERIENCEOutcomesExamples of goodoutcomes:watch a movie,talk to your grannyExamples of badoutcomes:‘circle of death’,poor voice quality
  21. 21. REVENUEFLOWSOUTCOMESFIT-FOR-PURPOSEEXPERIENCEFlowsComputationaloutputs requiredata inputs!A network deliversindividual andaggregate flows ofpackets to enablethis computation
  22. 22. REVENUEFLOWSOUTCOMESFIT-FOR-PURPOSEEXPERIENCEFlowsGood outcomes:Require flows withbounded packetloss and delayBad outcomes:Experience flowswith excessivepacket loss or delay
  23. 23. REVENUEFLOWSOUTCOMESFIT-FOR-PURPOSEEXPERIENCEDemand+
  24. 24. REVENUEFLOWSOUTCOMESFIT-FOR-PURPOSEEXPERIENCEDemand• Highlyheterogeneous• Has strong internalcouplings
  25. 25. COSTSWhere donetworkoperator costscome from?
  26. 26. COSTSTINTinAny physicalsubstrateSpectrum, fibre,copper, ducts, streetcabinets, celltowers, and the(unpowered)transmission androuting equipment
  27. 27. COSTSMECHANISMSTINMechanismsActive data links,operating queues inrouters, radionetwork controllers
  28. 28. COSTSMECHANISMSTRANSMISSIONTINTransmissionThe completesystem for movingdata from A to BTransmission iswhat the networkdoesrather than what itis
  29. 29. COSTSMECHANISMSTRANSMISSIONTINSupply-
  30. 30. COSTSMECHANISMSTRANSMISSIONTINMicrosecondsMinutesMonthsTimescalesWe can create andreallocate supply atdifferent timescales
  31. 31. COSTSMECHANISMSTRANSMISSIONTINSupplyScales together:extra resources atone level need moreof everything below
  32. 32. COSTSREVENUEMULTIPLEXINGMultiplexingHow are costs andrevenuesconnected?
  33. 33. COSTSREVENUEMULTIPLEXINGMultiplexingThis is where supplyand demand meet
  34. 34. COSTSREVENUEFIT-FOR-PURPOSEEXPERIENCEMULTIPLEXINGTINShares thefixed andfiniteresources
  35. 35. COSTSREVENUEFLOWSOUTCOMESFIT-FOR-PURPOSEEXPERIENCEMECHANISMSTRANSMISSIONREQUIRESENABLESTINMULTIPLEXINGTheLadderCOMPUTATIONTRANSLOCATION
  36. 36. OverviewTheLadderTheRungsTheMulti-plexingTheMoneyTheTroubleTheSolutionPREDICTABLENETWORKSOLUTIONS
  37. 37. What is multiplexing?Over-simplification ahead(many important statistical issues omitted)
  38. 38. Simplest case
  39. 39. ABCDVisualising multiplexingInput data flowsBefore
  40. 40. ABCDVisualising multiplexingInput data flows TransmitMuxBefore
  41. 41. ABCDVisualising multiplexingABCDInput data flows TransmitMux Demux Output data flowsBefore After
  42. 42. ABCDPackets get lostABCDBefore AfterLOSS
  43. 43. ABCDPackets get delayedABCDBefore AfterDELAY
  44. 44. ABCDQuality of Experience (QoE) failuresABCDBefore AfterQoE FAILURE Bad experiences are caused byexcessive loss and delay
  45. 45. ABCDVisualising multiplexingABCDBefore AfterDEMAND SUPPLY SUPPLYDEMAND
  46. 46. ABCDWe have (scheduling) choices!ABCDBefore AfterWhat to lose? What to delay (and by how much)?How to avoid QoE failures?
  47. 47. COSTSREVENUEFLOWSTRANSMISSIONMULTIPLEXINGMatchesinstantaneousdemand tosupply+-
  48. 48. COSTSREVENUEFLOWSTRANSMISSIONMULTIPLEXINGSchedulespackets (fromflows) fortransmission
  49. 49. COSTSREVENUECONSUMERPRODUCERTRADEROptiontrading space(Advanced class only!More information inour workshops…)+-Danger! Advancedmathematics ahead!
  50. 50. COSTSREVENUEMULTIPLEXINGA statisticalprocess –like a game ofchance
  51. 51. How does thisgame of chancework?
  52. 52. It’s a tussleNetworkusersNetworkoperators
  53. 53. Bad coincidencescause  experiences
  54. 54. More network use and usersmake bad coincidencesmore likely
  55. 55. Resource efficiencyLOW HIGHMULTIPLEXING
  56. 56. Capacity demandLOW HIGHMULTIPLEXINGFeasible InfeasibleMAX CAPACITY
  57. 57. Risk of bad coincidencesLOW HIGHMULTIPLEXINGIncreases with load
  58. 58. FlowefficiencyLOWHIGHMULTIPLEXING
  59. 59. FlowefficiencyLOWHIGHMULTIPLEXING
  60. 60. SchedulabilitydemandLOWHIGHFeasibleInfeasibleMAX SCHEDULABILITY
  61. 61. Resource efficiencyFlowefficiencyLOW HIGHLOWHIGHMULTIPLEXINGStrong flow isolation= Happy usersHigh stat mux gain= Happy operator
  62. 62. Resource efficiencyFlowefficiencyLOW HIGHLOWHIGH??HELLHEAVENMULTIPLEXING
  63. 63. Resource efficiencyFlowefficiencyLOW HIGHLOWHIGHFeels to users like thenetwork is empty,even when it is full!MULTIPLEXINGHEAVEN
  64. 64. Resource efficiencyFlowefficiencyLOW HIGHLOWHIGHRequires lots and lotsof good coincidences& very few badcoincidencesMULTIPLEXINGHEAVEN
  65. 65. Resource efficiencyFlowefficiencyLOW HIGHLOWHIGHMULTIPLEXINGHEAVENBy tipping the oddsthrough effectivescheduling
  66. 66. COSTSREVENUEMULTIPLEXINGSuccessDepends on howwell you do thisscheduling• Affects user fitness-for-purpose and QoEhazards…• …as well as tinrequired and costhazards…• …and thus profit andrisk
  67. 67. COSTSREVENUEMULTIPLEXINGFailurePoor flow isolation(too many badcoincidences)Poor resource usage(too muchover-provisioningor unused capacity)£
  68. 68. COSTSREVENUEMULTIPLEXINGPredictabilityCan only play thegame of chance ifyou know the odds.If you don’t knowthe odds, or theykeep changing asyou play,then you lose!
  69. 69. OverviewTheLadderTheRungsTheMulti-plexingTheMoneyTheTroubleTheSolutionPREDICTABLENETWORKSOLUTIONS
  70. 70. COSTSREVENUEFLOWSOUTCOMESFIT-FOR-PURPOSEEXPERIENCEMECHANISMSTRANSMISSIONTINMULTIPLEXINGRevenue£
  71. 71. ANY NETWORK SERVICEVALUE IN USE The customerdoesn’t care aboutoperator revenueThey seekvalue-in-use
  72. 72. ANY NETWORK SERVICEVALUE IN USEFIT-FOR-PURPOSEEXPERIENCEEffective TaskSubstitutionValue-in-use comesfrom substituting foranother task thathas higher costsand/or lowerbenefits.Fitness-for-purposeis when thissubstitution occurs.
  73. 73. COSTSANY NETWORK SERVICEVALUE IN USECUSTOMERDOMAINSERVICEOPERATORDOMAINTwoperspectives• Customer• Service operator
  74. 74. ANY NETWORK SERVICEVALUE IN USECUSTOMERDOMAINSERVICEOPERATORDOMAINTwoperspectivesThey don’t concernthemselves aboutthe same things
  75. 75. ANY NETWORK SERVICEVALUE IN USECUSTOMERDOMAINSERVICEOPERATORDOMAINFLOWSBENEFITKEYPAYMENTBenefits• Payment istypically for dataflows across thenetwork• This is at adifferent logicallevel to what thecustomer values
  76. 76. COSTSREVENUEFLOWSOUTCOMESFIT-FOR-PURPOSEEXPERIENCEMECHANISMSTRANSMISSIONTINMULTIPLEXINGCosts£
  77. 77. COSTSANY NETWORK SERVICEVALUE IN USEPAYMENTCUSTOMERDOMAINSERVICEOPERATORDOMAINFLOWSOUTCOMESFIT-FOR-PURPOSE EXPERIENCEMULTIPLEXINGMECHANISMSTRANSMISSIONTINCOSTKEYPAYMENTUser costs
  78. 78. CAPEX FOR EVERY ASSETANY NETWORK SERVICEVALUE IN USECUSTOMERDOMAINSERVICEOPERATORDOMAINFLOWSOUTCOMESFIT-FOR-PURPOSE EXPERIENCEMULTIPLEXINGMECHANISMSTRANSMISSIONTINKEYPAYMENTCapexScales according tohow much tin isrequiredHalving thescheduling efficiencydoubles your capex!COSTPAYMENT
  79. 79. CAPEX FOR EVERY ASSETANY NETWORK SERVICEVALUE IN USEOPEX FOREVERYACTIVITYPAYMENTCUSTOMERDOMAINSERVICEOPERATORDOMAINFLOWSOUTCOMESFIT-FOR-PURPOSE EXPERIENCEMULTIPLEXINGMECHANISMSTRANSMISSIONTINCOSTKEYPAYMENTOpex
  80. 80. COSTSREVENUEFLOWSOUTCOMESFIT-FOR-PURPOSEEXPERIENCEMECHANISMSTRANSMISSIONTINMULTIPLEXINGRisks
  81. 81. CAPEX FOR EVERY ASSETANY NETWORK SERVICEVALUE IN USEOPEX FOREVERYACTIVITYPAYMENTCUSTOMERDOMAINSERVICEOPERATORDOMAINFLOWSOUTCOMESFIT-FOR-PURPOSE EXPERIENCEMULTIPLEXINGMECHANISMSTRANSMISSIONTINPAYMENTHazardsThings can(and do)go wrongBENEFITCOSTKEYHAZARD
  82. 82. CAPEX FOR EVERY ASSETANY NETWORK SERVICEVALUE IN USEOPEX FOREVERYACTIVITYPLAN BFAILUREPAYMENTCUSTOMERDOMAINSERVICEOPERATORDOMAINFLOWSOUTCOMESFIT-FOR-PURPOSE EXPERIENCEMULTIPLEXINGMECHANISMSTRANSMISSIONTINPAYMENTBENEFITCOSTKEYHAZARDHazardsThe Customerexperiences QoEfailures & mustinsure againstexcess risk
  83. 83. CAPEX FOR EVERY ASSETANY NETWORK SERVICEVALUE IN USEOPEX FOREVERYACTIVITYPLAN BFAILUREPAYMENTCUSTOMERDOMAINSERVICEOPERATORDOMAINFLOWSOUTCOMESFIT-FOR-PURPOSE EXPERIENCEMULTIPLEXINGMECHANISMSTRANSMISSIONTINPAYMENTHazardsThe networkoperator has SLAs &may requireunplanned capacityupgradesCAPACITYBENEFITCOSTKEYHAZARDREFUND
  84. 84. CAPEX FOR EVERY ASSETANY NETWORK SERVICEVALUE IN USEOPEX FOREVERYACTIVITYPLAN BFAILUREPAYMENTCUSTOMERDOMAINSERVICEOPERATORDOMAINFLOWSOUTCOMESFIT-FOR-PURPOSE EXPERIENCEMULTIPLEXINGMECHANISMSTRANSMISSIONTINPAYMENTHazardsThe size of thehazards are alldirectly related tohow well we do themultiplexingOur experience isthat these hazardsare poorly modelledin broadbandnetworks (if at all)CAPACITYBENEFITCOSTKEYHAZARDREFUND
  85. 85. OverviewTheLadderTheRungsTheMulti-plexingTheMoneyTheTroubleTheSolutionPREDICTABLENETWORKSOLUTIONS
  86. 86. COSTSREVENUEHow well arenetworkoperatorsplaying thegame ofchance?
  87. 87. CAPEX FOR EVERY ASSETTELEPHONY SERVICEVALUE IN USEOPEX FOREVERYACTIVITYTRAVEL TOLONDONFAILEDCALLCALLCHARGECUSTOMERDOMAINNETWORKOPERATORDOMAINFLOWSOUTCOMESFIT-FOR-PURPOSE EXPERIENCEMULTIPLEXINGMECHANISMSTRANSMISSIONTINCALLCHARGEBENEFITCOSTKEYHAZARDREFUNDFixedTelephonyCosts and revenuesin balanceHazards wellcontained andmanagedLife used to besimple and good…
  88. 88. But then we changed…Time-divisionmultiplexedcircuitsPacket-basedstatisticalmultiplexingComplete phaseand flow isolationWeak phaseand flow isolationTELEPHONY BROADBANDGame ofchancewas easyGame ofchance ishard
  89. 89. Resource efficiencyFlowefficiencyLOW HIGHLOWHIGH TDM(core)MULTIPLEXINGTDM(edge)TDM for voice had highly-utilised network cores, andlow peak-to-mean at thenetwork edge
  90. 90. Resource efficiencyFlowefficiencyLOW HIGHLOWHIGHMULTIPLEXINGTDMFor bursty data,TDM is highlyinefficient, evenif it is veryeffective
  91. 91. Resource efficiencyFlowefficiencyLOW HIGHLOWHIGHIP(core)MULTIPLEXINGIP is both efficient andeffective in the core formany kinds of data
  92. 92. Resource efficiencyFlowefficiencyLOW HIGHLOWHIGHIP(access network)MULTIPLEXINGHowever, IP ismuch weaker atthe network edge.Why is this?
  93. 93. Resource efficiencyFlowefficiencyLOW HIGHLOWHIGHIP(access network)MULTIPLEXINGHEAVEN
  94. 94. Resource efficiencyFlowefficiencyLOW MEDIUMLOWHIGHMULTIPLEXINGHIGHIP(access network)HEAVENHEAVENHeaven gets further away
  95. 95. Resource efficiencyFlowefficiencyLOW MEDIUMLOWHIGHMULTIPLEXINGHIGHIP(access network)Ineffective scheduling forcesreliance on over-provisioning(to try to make badcoincidences rare)- which has diminishingreturnsHEAVENHEAVEN
  96. 96. Resource efficiencyFlowefficiencyLOW MEDIUMLOWHIGHMULTIPLEXINGHIGHCurrent approaches areinfeasible to schedule athigh loadIP(access network)
  97. 97. Resource efficiencyFlowefficiencyLOW MEDIUMLOWHIGHMULTIPLEXINGHIGHIP(access network)Network collapses
  98. 98. We want to know!Are networkoperatorsdelivering fitness-for-purpose andgood outcomes
  99. 99. We want to know!
  100. 100. CAPEX FOR EVERY ASSETINTERNET SERVICE PROVIDERVALUE IN USECUSTOMERDOMAINNETWORKOPERATORDOMAINFLOWSOUTCOMESMULTIPLEXINGMECHANISMSTRANSMISSIONTINFIT-FOR-PURPOSEEXPERIENCE? Have lostvisibility andcontrol overoutcomes
  101. 101. CAPEX FOR EVERY ASSETINTERNET SERVICE PROVIDERVALUE IN USECUSTOMERDOMAINNETWORKOPERATORDOMAINFLOWSOUTCOMESMULTIPLEXINGMECHANISMSTRANSMISSIONTINFIT-FOR-PURPOSEEXPERIENCEThe broadbandindustry isdeliveringpurpose-for-fitness,notfitness-for-purpose?
  102. 102. CAPEX FOR EVERY ASSETINTERNET SERVICE PROVIDERVALUE IN USECUSTOMERDOMAINNETWORKOPERATORDOMAINFLOWSOUTCOMESMULTIPLEXINGMECHANISMSTRANSMISSIONTINFIT-FOR-PURPOSEEXPERIENCESchedulabilityhas beenlargelyabandoned(although theissues areomnipresent)
  103. 103. CAPEX FOR EVERY ASSETINTERNET SERVICE PROVIDERVALUE IN USECUSTOMERDOMAINNETWORKOPERATORDOMAINFLOWSOUTCOMESMULTIPLEXINGMECHANISMSTRANSMISSIONTINFIT-FOR-PURPOSEEXPERIENCEAt best wecompete ontransmissionspeed, which isonly a weakproxy foroutcomes
  104. 104. CAPEX FOR EVERY ASSETINTERNET SERVICE PROVIDERVALUE IN USECUSTOMERDOMAINNETWORKOPERATORDOMAINFLOWSOUTCOMESMULTIPLEXINGMECHANISMSTRANSMISSIONTINFIT-FOR-PURPOSEEXPERIENCEMarketingfocus onmechanismsand tin(4G! Fibre!3GPP rel 22!?!)
  105. 105. We want to know!Are user QoEhazards beingsufficientlymanaged andmitigated
  106. 106. We want to know!
  107. 107. CAPEX FOR EVERY ASSETINTERNET SERVICE PROVIDERVALUE IN USEMAKE APHONECALLFAILEDVIDEOLINKCUSTOMERDOMAINNETWORKOPERATORDOMAINFLOWSOUTCOMESMULTIPLEXINGMECHANISMSTRANSMISSIONTINFIT-FOR-PURPOSEEXPERIENCELack of serviceassurancemeans userscannot dependon broadbandservices:creates hiddencosts
  108. 108. We want to know!Is tin being usedefficiently andeffectively todeliver flows
  109. 109. We want to know!
  110. 110. LOTS OF UNNECESSARY CAPEXINTERNET SERVICE PROVIDERVALUE IN USECUSTOMERDOMAINNETWORKOPERATORDOMAINFLOWSOUTCOMESMULTIPLEXINGMECHANISMSTRANSMISSIONTINFIT-FOR-PURPOSEEXPERIENCEUsing tin tosolve what arerightlyschedulingproblemsHugemisallocationof capital
  111. 111. We want to know!Are operatorsappropriatelymanaging andmitigating theircost hazards
  112. 112. We want to know!
  113. 113. UNPLANNED CAPEX SPENDINGINTERNET SERVICE PROVIDERVALUE IN USECUSTOMERDOMAINNETWORKOPERATORDOMAINFLOWSOUTCOMESMULTIPLEXINGMECHANISMSTRANSMISSIONTINFIT-FOR-PURPOSEEXPERIENCECAPACITYHave taken onnew contingentliabilitiesUncosted, andnot seen inbalance sheet
  114. 114. OverviewTheLadderTheRungsTheMulti-plexingTheMoneyTheTroubleTheSolutionPREDICTABLENETWORKSOLUTIONS
  115. 115. COSTSREVENUEFLOWSOUTCOMESFIT-FOR-PURPOSEEXPERIENCEMECHANISMSTRANSMISSIONTINMULTIPLEXINGServiceAssuranceHow can we restorelink to outcomesand fitness-for-purpose?Then more can becharged for reducinguser QoE hazardsCOMPUTATIONTRANSLOCATION
  116. 116. COMPUTATIONTRANSLOCATIONCOSTSREVENUEFLOWSOUTCOMESFIT-FOR-PURPOSEEXPERIENCEMECHANISMSTRANSMISSIONTINMULTIPLEXINGQualityTransportAgreements• How can weformally describethe requirementsof demand andcapabilities ofsupply?• How can wecreate digitalsupply chains?
  117. 117. COMPUTATIONTRANSLOCATIONCOSTSREVENUEFLOWSOUTCOMESFIT-FOR-PURPOSEEXPERIENCEMECHANISMSTRANSMISSIONTINPolyservicenetworksHow can we matchdiversity of demandwith an appropriatediversity of supply?DEMAND SUPPLY
  118. 118. COSTSREVENUEFLOWSOUTCOMESFIT-FOR-PURPOSEEXPERIENCEMECHANISMSTRANSMISSIONTINMULTIPLEXINGAdvancedTrading SpacesHow can we matchsupply and demandat all timescales?MicrosecondsMinutesMonths
  119. 119. Sustainable BroadbandEconomics WorkshopLondon, 22nd May 2013Fundamentals of NetworkPerformance WorkshopLondon, 24th May 2013www.sustainablebroadband.comPREDICTABLENETWORKSOLUTIONS
  120. 120. Neil DaviesNeil.Davies@pnsol.comPeter ThompsonPeter.Thompson@pnsol.comMartin Geddesmail@martingeddes.comPREDICTABLENETWORKSOLUTIONS

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