SXSW14 - Four Macro Trends Driving the Evolution of the Internet
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Transcript of SXSW14 - Four Macro Trends Driving the Evolution of the Internet
Top 4 Macro Trends Driving Evolution of the Internet March 10, 2014 – Austin, TX #SXSW
Cory von Wallenstein Chief Technologist @cvwdyn
Pg. 2 Macro Trends Driving Evolution of the Internet @cvwdyn #dynmmt
Trend 1
User experience is the new
competitive differentiator.
Pg. 3 Macro Trends Driving Evolution of the Internet @cvwdyn #dynmmt
$3.2B
$2B+
$3.5B+
Pg. 4 Macro Trends Driving Evolution of the Internet @cvwdyn #dynmmt
2010: 58% of US consumers
h"p://cvw.gs/amex2010
would pay a higher price if they had a strong expecta>on of receiving superior service. Consensus around 9% op6mal premium.
2012: 66% of US consumers
h"p://cvw.gs/amex2012
would pay a higher price if they had a strong expecta>on of receiving superior service. Consensus around 13% op6mal premium.
Pg. 5 Macro Trends Driving Evolution of the Internet @cvwdyn #dynmmt
From 2010 to 2012: The number of folks who voted for superior service
with their wallets went from 57% to 75%.
Businesses are responding.
Pg. 6 Macro Trends Driving Evolution of the Internet @cvwdyn #dynmmt
Why would you switch banks? A slightly more beneficial interest rate isn’t
compelling to go through the hurdles of switching. Give me a mobile experience so I don’t have to call or
go to a branch.
Pg. 7 Macro Trends Driving Evolution of the Internet @cvwdyn #dynmmt
Pg. 8 Macro Trends Driving Evolution of the Internet @cvwdyn #dynmmt
Speed == $$$ 100ms = 1% lost sales (Amazon)
0.5s = 20% traffic drop (Google) h"p://cvw.gs/amz-‐latency
h"p://cvw.gs/ggl-‐latency
h"p://cvw.gs/km-‐latency
Pg. 9 Macro Trends Driving Evolution of the Internet @cvwdyn #dynmmt
Superior Experience More Value
Stakes are Raised How will this affect
the Internet?
Pg. 10 Macro Trends Driving Evolution of the Internet @cvwdyn #dynmmt
How will this affect the Internet?
Growth of net new Internet users is far away from the original backbone of the Internet (growth is in APAC, Africa,
South America).
Urban centers are more network congested than ever before.
Content and apps will push further to the edges of the Internet to deliver excellent experiences.
Pg. 11 Macro Trends Driving Evolution of the Internet @cvwdyn #dynmmt
h"p://www.cogentco.com/files/images/network/network_map/networkmap_global_large.png
Speed of light 299,792.458 km/second
(in a vacuum)
Theore>cal RTT ~40ms
Real RTT ~90ms
Pg. 12 Macro Trends Driving Evolution of the Internet @cvwdyn #dynmmt
USA 20ms 20Mbps
Pg. 13 Macro Trends Driving Evolution of the Internet @cvwdyn #dynmmt
3.1s
Pg. 14 Macro Trends Driving Evolution of the Internet @cvwdyn #dynmmt
Japan 250ms 40Mbps
Pg. 15 Macro Trends Driving Evolution of the Internet @cvwdyn #dynmmt
Japan 250ms 40Mbps
Pg. 16 Macro Trends Driving Evolution of the Internet @cvwdyn #dynmmt
4.2s 36% slower
Pg. 17 Macro Trends Driving Evolution of the Internet @cvwdyn #dynmmt
South Africa 400ms 4Mbps
Pg. 18 Macro Trends Driving Evolution of the Internet @cvwdyn #dynmmt
7.6s 146% slower
Pg. 19 Macro Trends Driving Evolution of the Internet @cvwdyn #dynmmt
We can’t break the speed of light.
Customers can be gained through superior service, but
slow is the new down6me.
We’ll push closer to the edge to deliver.
Pg. 20 Macro Trends Driving Evolution of the Internet @cvwdyn #dynmmt
Trend 2
A Cambrian moment of
innovation ecosystems.
Pg. 21 Macro Trends Driving Evolution of the Internet @cvwdyn #dynmmt
h"p://cvw.gs/econ-‐camb
Pg. 22 Macro Trends Driving Evolution of the Internet @cvwdyn #dynmmt
Trend 3
Net neutrality and the
evolving business model of
the Internet.
Pg. 23 Macro Trends Driving Evolution of the Internet @cvwdyn #dynmmt
h"p://cvw.gs/giga-‐nn
Pg. 24 Macro Trends Driving Evolution of the Internet @cvwdyn #dynmmt
Trend 4
“Things” outnumber
“people”.
Pg. 25 Macro Trends Driving Evolution of the Internet @cvwdyn #dynmmt
“People”: ~7B
h"p://cvw.gs/cisco-‐iot
“Things” today: ~14B
IPv4 Addresses: ~4B
“Things” 2020: ~50B
Pg. 26 Macro Trends Driving Evolution of the Internet @cvwdyn #dynmmt
Four Macro Trends Driving Evolution of the Internet 1. User experience is the new compe>>ve differen>ator. 2. A Cambrian moment in innova>on ecosystems. 3. Net neutrality and the evolving business model of the Internet. 4. “Things” outnumber “people”.
Dyn /delivers/ Internet Performance • Traffic management (user types “twi"er.com”) • Message management (user receives “file shared” email from Box) • Performance assurance (understand your Internet performance)