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The Ladder: How money and multiplexing are connected

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The Ladder: How money and multiplexing are connected

  1. 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. 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. 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. 4. PREDICTABLE NETWORK SOLUTIONS Sustainable Broadband Economics Workshop London, 22nd May 2013 Fundamentals of Network Performance Workshop London, 24th May 2013 www.sustainablebroadband.com
  5. 5. Setup The Ladder The Rungs The Multi- plexing The Money The Trouble The Solution PREDICTABLE NETWORK SOLUTIONS Substance
  6. 6. Overview The Ladder The Rungs The Multi- plexing The Money The Trouble The Solution PREDICTABLE NETWORK SOLUTIONS
  7. 7. REVENUE How are network operator costs and revenues connected? COSTS
  8. 8. COSTS REVENUE The “Ladder” provides the causal links
  9. 9. COSTS REVENUE REQUIRES ENABLES It is a chain of reasoning Each ‘rung’ enables the one above… …and requires the one below ENABLES REQUIRES
  10. 10. COSTS REVENUE REQUIRES ENABLES Hard constraints: no escape!
  11. 11. COSTS REVENUE REQUIRES ENABLES It helps us to answer the question: How can the network operator maximise profits? - +
  12. 12. COSTS REVENUE REQUIRES ENABLES Why care? Failure to understand and exploit these simple causal relationships creates enormous waste and missed revenue opportunities
  13. 13. Overview The Ladder The Rungs The Multi- plexing The Money The Trouble The Solution PREDICTABLE NETWORK SOLUTIONS
  14. 14. REVENUE What causes users to pay network operators?
  15. 15. REVENUE Network users can have good experiences  or bad experiences  FIT-FOR-PURPOSE EXPERIENCE
  16. 16. REVENUE Revenue is a result of delivering fit-for-purpose experiences     FIT-FOR-PURPOSE EXPERIENCE
  17. 17. REVENUE What is a ‘fit-for- purpose’ experience? FIT-FOR-PURPOSE EXPERIENCE
  18. 18. REVENUE Good experiences     sufficiently common + Bad experiences  sufficiently rare FIT-FOR-PURPOSE EXPERIENCE
  19. 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. 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. 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. 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
  23. 23. REVENUE FLOWS OUTCOMES FIT-FOR-PURPOSE EXPERIENCE Demand +
  24. 24. REVENUE FLOWS OUTCOMES FIT-FOR-PURPOSE EXPERIENCE Demand • Highly heterogeneous • Has strong internal couplings
  25. 25. COSTS Where do network operator costs come from?
  26. 26. COSTS TIN Tin Any physical substrate Spectrum, fibre, copper, ducts, street cabinets, cell towers, and the (unpowered) transmission and routing equipment
  27. 27. COSTS MECHANISMS TIN Mechanisms Active data links, operating queues in routers, radio network controllers
  28. 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
  29. 29. COSTS MECHANISMS TRANSMISSION TIN Supply -
  30. 30. COSTS MECHANISMS TRANSMISSION TIN Microseconds Minutes Months Timescales We can create and reallocate supply at different timescales
  31. 31. COSTS MECHANISMS TRANSMISSION TIN Supply Scales together: extra resources at one level need more of everything below
  32. 32. COSTS REVENUE MULTIPLEXING Multiplexing How are costs and revenues connected?
  33. 33. COSTS REVENUE MULTIPLEXING Multiplexing This is where supply and demand meet
  34. 34. COSTS REVENUE FIT-FOR-PURPOSE EXPERIENCE MULTIPLEXING TIN Shares the fixed and finite resources
  35. 35. COSTS REVENUE FLOWS OUTCOMES FIT-FOR-PURPOSE EXPERIENCE MECHANISMS TRANSMISSION REQUIRES ENABLES TIN MULTIPLEXING The Ladder COMPUTATIONTRANSLOCATION
  36. 36. Overview The Ladder The Rungs The Multi- plexing The Money The Trouble The Solution PREDICTABLE NETWORK SOLUTIONS
  37. 37. What is multiplexing? Over-simplification ahead (many important statistical issues omitted)
  38. 38. Simplest case
  39. 39. A B C D Visualising multiplexing Input data flows Before
  40. 40. A B C D Visualising multiplexing Input data flows TransmitMux Before
  41. 41. A B C D Visualising multiplexing A B C D Input data flows TransmitMux Demux Output data flows Before After
  42. 42. A B C D Packets get lost A B C D Before After LOSS
  43. 43. A B C D Packets get delayed A B C D Before After DELAY
  44. 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. 45. A B C D Visualising multiplexing A B C D Before After DEMAND SUPPLY SUPPLYDEMAND
  46. 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?
  47. 47. COSTS REVENUE FLOWS TRANSMISSION MULTIPLEXING Matches instantaneous demand to supply + -
  48. 48. COSTS REVENUE FLOWS TRANSMISSION MULTIPLEXING Schedules packets (from flows) for transmission
  49. 49. COSTS REVENUE CONSUMER PRODUCER TRADER Option trading space (Advanced class only! More information in our workshops…) + - Danger! Advanced mathematics ahead!
  50. 50. COSTS REVENUE MULTIPLEXING A statistical process – like a game of chance
  51. 51. How does this game of chance work?
  52. 52. It’s a tussle Network users Network operators
  53. 53. Bad coincidences cause  experiences
  54. 54. More network use and users make bad coincidences more likely
  55. 55. Resource efficiency LOW HIGH MULTIPLEXING
  56. 56. Capacity demand LOW HIGH MULTIPLEXING Feasible Infeasible MAX CAPACITY
  57. 57. Risk of bad coincidences LOW HIGH MULTIPLEXING Increases with load
  58. 58. Flowefficiency LOW HIGH MULTIPLEXING
  59. 59. Flowefficiency LOW HIGH MULTIPLEXING  
  60. 60. Schedulabilitydemand LOW HIGH Feasible Infeasible MAX SCHEDULABILITY
  61. 61. Resource efficiency Flowefficiency LOW HIGH LOW HIGH MULTIPLEXING Strong flow isolation = Happy users High stat mux gain = Happy operator
  62. 62. Resource efficiency Flowefficiency LOW HIGH LOW HIGH ? ?HELL HEAVEN MULTIPLEXING
  63. 63. Resource efficiency Flowefficiency LOW HIGH LOW HIGH Feels to users like the network is empty, even when it is full! MULTIPLEXING HEAVEN
  64. 64. Resource efficiency Flowefficiency LOW HIGH LOW HIGH Requires lots and lots of good coincidences & very few bad coincidences MULTIPLEXING HEAVEN
  65. 65. Resource efficiency Flowefficiency LOW HIGH LOW HIGH MULTIPLEXING HEAVEN By tipping the odds through effective scheduling
  66. 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. 67. COSTS REVENUE MULTIPLEXING Failure Poor flow isolation (too many bad coincidences) Poor resource usage (too much over-provisioning or unused capacity)  £
  68. 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!
  69. 69. Overview The Ladder The Rungs The Multi- plexing The Money The Trouble The Solution PREDICTABLE NETWORK SOLUTIONS
  70. 70. COSTS REVENUE FLOWS OUTCOMES FIT-FOR-PURPOSE EXPERIENCE MECHANISMS TRANSMISSION TIN MULTIPLEXING Revenue £
  71. 71. ANY NETWORK SERVICE VALUE IN USE The customer doesn’t care about operator revenue They seek value-in-use
  72. 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. 73. COSTS ANY NETWORK SERVICEVALUE IN USE CUSTOMERDOMAIN SERVICEOPERATORDOMAIN Two perspectives • Customer • Service operator
  74. 74. ANY NETWORK SERVICEVALUE IN USE CUSTOMERDOMAIN SERVICEOPERATORDOMAIN Two perspectives They don’t concern themselves about the same things
  75. 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
  76. 76. COSTS REVENUE FLOWS OUTCOMES FIT-FOR-PURPOSE EXPERIENCE MECHANISMS TRANSMISSION TIN MULTIPLEXING Costs £
  77. 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. 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. 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
  80. 80. COSTS REVENUE FLOWS OUTCOMES FIT-FOR-PURPOSE EXPERIENCE MECHANISMS TRANSMISSION TIN MULTIPLEXING Risks 
  81. 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. 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. 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. 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
  85. 85. Overview The Ladder The Rungs The Multi- plexing The Money The Trouble The Solution PREDICTABLE NETWORK SOLUTIONS
  86. 86. COSTS REVENUE How well are network operators playing the game of chance?
  87. 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. 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. 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. 90. Resource efficiency Flowefficiency LOW HIGH LOW HIGH MULTIPLEXING TDM For bursty data, TDM is highly inefficient, even if it is very effective
  91. 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. 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. 93. Resource efficiency Flowefficiency LOW HIGH LOW HIGH IP (access network) MULTIPLEXING HEAVEN
  94. 94. Resource efficiency Flowefficiency LOW MEDIUM LOW HIGH MULTIPLEXING HIGH IP (access network) HEAVENHEAVEN Heaven gets further away
  95. 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. 96. Resource efficiency Flowefficiency LOW MEDIUM LOW HIGH MULTIPLEXING HIGH Current approaches are infeasible to schedule at high load IP (access network)
  97. 97. Resource efficiency Flowefficiency LOW MEDIUM LOW HIGH MULTIPLEXING HIGH IP (access network) Network collapses
  98. 98. We want to know! Are network operators delivering fitness- for-purpose and good outcomes
  99. 99. We want to know!
  100. 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. 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. 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. 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. 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. 105. We want to know! Are user QoE hazards being sufficiently managed and mitigated
  106. 106. We want to know!
  107. 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. 108. We want to know! Is tin being used efficiently and effectively to deliver flows
  109. 109. We want to know!
  110. 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. 111. We want to know! Are operators appropriately managing and mitigating their cost hazards
  112. 112. We want to know!
  113. 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
  114. 114. Overview The Ladder The Rungs The Multi- plexing The Money The Trouble The Solution PREDICTABLE NETWORK SOLUTIONS
  115. 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. 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. 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. 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. 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. 120. Neil Davies Neil.Davies@pnsol.com Peter Thompson Peter.Thompson@pnsol.com Martin Geddes mail@martingeddes.com PREDICTABLE NETWORK SOLUTIONS

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