Do The Economics Of Bandwidth Scale? Juniper Presentation
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Transcript of Do The Economics Of Bandwidth Scale? Juniper Presentation
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THE BREAKING POINT?
Kevin JohnsonOctober 20th, 2009
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Beijing Olympics Symbolizes the Emergence and Growth of New Economies Worldwide
Human Genome Project Successfully Maps Complete Human DNA
A DECADE OF CHANGE
Human Genome Project Successfully Maps Complete Human DNA
1999–2009
The Digital DecadeArrives
Beijing Olympics Symbolizes the Emergence and Growth of New Economies Worldwide
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THE CONNECTED CULTURE 2010–2020Proliferation of Devices Content Consumption
Machine to MachineConnected Socialization
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INTERNET TRAFFIC IS GROWING
Chart Title# of Connections
Worldwide internet traffic, 1990-2008 PB/month
9,000
8,000
7,000
6,000
5,000
4,000
3,000
2,000
1,000
1990
200820062004200220001998199619941992
+32%2008-2020
CAGR
WWW is born
Digital decade
+36%Video
+24%Non-video
Worldwide internet traffic, 1990-2020 PB/month
27x Growth2008-2020
Forecast Model240,000
212,000
185,500
159,000
132,500
106,000
79,500
53,000
26,500
1990
2020201720142011200820052002199919961993
Plus Machine to Machine?
Source: Juniper, Cisco, MINTS
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AT CURRENT PACE OF INNOVATION NETWORK INVESTMENT OUTPACES REVENUE
Source: Juniper, Cisco, MINTS, Infonetics
$300
$400
$500
$100
$200
Worldwide service provider revenue vs. investments with innovation, 2003-2009 $ in USD Billion
2003 2004 2005 2006 2007 2008 2009
Worldwide service provider revenue vs. investments with innovation, 2003-2020 $ in USD Billion
2003 2005 2007 2009 2011 2013 2015 2017 2019
$1,250
$1,500
$1,000
$250
$500
$750
Forecast Model
Continued improvements driving down capex and opex at the historical rate only delay the inevitable breaking point
Are consumers prepared to pay $385 for broadband connectivity?
Note: Investments include both annual capex and opex forecasts for IP; revenue based on linear regression with R2=0.98836 plus incremental revenue from scaling existing video delivery; capex adjusted for annual improvements of 31.38% reflecting combined historical capacity improvements and price reductions; opex adjusted for annual improvements of 29.49% reflecting historical opex improvements Forecasted Investment from IP
Historical Investment from IP
Forecasted Revenue from IP
Historical Revenue from IP
Revenue
Investment
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DRIVING TO A PLATFORM VIEW
• Thinking it’s about the box
What we need to get past One example…
• Established to solve the new media problem
• Needed an open platform on which to scale
• Needed to drive more value into the network equation
Partnering with Juniper to deliver new solutions
• Thinking it’s about the box
What we need to get past
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SCALE OR FAIL
• With simplified infrastructures that increase flexibility and improve ROI
• With automation that reduces operational costs
• With business models that enable new revenue sources
• With environment efficiencies that save energy and costs
Together we need to innovate…
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