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Beyond The Demarc

Beyond The Demarc. The Revenue Opportunities Inside the Digital Home. Evolution of the “Internet Service”. Historical Internet Use. Applications Email, banking, print news, travel planning, file downloads… Sporadic use of Internet connection. Service expectations “Ends at the demarc”

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Beyond The Demarc

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  1. Beyond The Demarc The Revenue Opportunities Inside the Digital Home

  2. Evolution of the “Internet Service”

  3. Historical Internet Use • Applications • Email, banking, print news, travel planning, file downloads… • Sporadic use of Internet connection • Service expectations • “Ends at the demarc” • “It just works”… on the computer • Highly oversubscribed • “All you can eat” data model Wasn’t that a simpler world?

  4. Compass Software Business • Objectives • Complement Calix systems offering with software products that help our customers become successful market competitors focused on: • Being the enterprise IT service provider to their customers • Delivering outstanding customer service • Bring to market software applications that… • Identify new SERVICEopportunities • Optimize NETWORKresources • Increase SUBSCRIBERsatisfaction • Reduce COSTof delivering services • Product delivery • Business model: Software as a Service • Product delivery strategy: Cloud Hosting

  5. Compass Flow Analyzer • Flow Analyzer • Collection of aggregated consumption data • Per Subscriber - Per Application - Over time • Presentation of consumption data • Standard, Open interfaces to Billing System • Independent of the access network equipment • Field proven solution • 80 CSPs monitoring more than 500,000 subscribers Calix Data Center Service Provider NOC AccessNetwork Billing System

  6. Unconventional Wisdom… Insight #1 • The 20/2 rule of Internet usage • 20% of traffic from 2% of subscribers • Average data downloaded per month • Top 2%: More than 100 GB • “Bottom” 98%: Less than 10 GB > 100 GB per month <10 GB per month (*) Information is based on actual data collected using Compass Flow Analyzer in access networks from a variety of North American CSPs

  7. Unconventional Wisdom… Insight #2 • The Video Dominance • Video streaming represents 45% of all downstream data • Less than 10% of subscribers use video streaming applications (*) Information is based on actual data collected using Compass Flow Analyzer in access networks from a variety of North American CSPs

  8. What does this mean? • How much is 10 GB of data? • Emails: 500,000 • Songs: 4,000 • Pictures: 2,000 • Gaming hours: 850 • SD movies: 6 • HD Movies: 3

  9. What does this mean? • If video adoption doubles… • Network capacity requirements DOUBLE • Equivalent to 3 HD movies per month • That’s still less than 20% of subscribers We are only a few movies away from doubling network capacity!!

  10. Today’s Internet Use • Applications • Video streaming, conferencing, telecommuting, gaming… • Sustained use of Internet connection

  11. Today’s Internet Use • Applications • Video streaming, conferencing, telecommuting, gaming… • Sustained use of Internet connection • Service expectations • “Starts on the device” • “It just works”…on all devices • Computers, tablets, smart phones, game consoles, TVs… • App quality of experience • Gaming, VPN, streaming… • … Oh, yes, and download speed “All you can eat” service models do not meet subscribers’ expectations

  12. The Service Provider Opportunity

  13. The Service Provider Opportunity • Change nothing… • Unsustainable network costs • Inability to serve subscribers needs • Inability to compete • Enhance your standing by • Understanding what your subscribers need • Designing services with tight market fit • Targeting the right services to the right subscribers • Delivering outstanding customer service Doing this right will require understanding your subscribers behaviors

  14. The Service Provider Opportunity

  15. Market Need: Internet Access • Understand drivers of Internet usage • Most popular applications • How many subscribers use each application? • Application requirements • Speed (bits per second) • Usage (bytes) Most popular applications (*) Most active users (*) Traffic pattern (*) (*) Graphics generated using Compass Flow Analyzer in access networks from a variety of North American CSPs

  16. The Service Provider Opportunity

  17. Service Definition: Internet Access (I) • Develop acceptable use policies • Prevent use of the network for illegal purposes • Rationalize unintended (but abusive) bandwidth consumption behaviors • Examples • Meter data usage for all subscribers • Benchmark “acceptable” data usage thresholds • Define “all you can eat” data caps • Well above the average user • Define fee structure for data overages

  18. Service Definition: Internet Access (I) • Develop acceptable use policies • Prevent use of the network for illegal purposes • Rationalize unintended (but abusive) bandwidth consumption behaviors • Examples: • Meter data usage for all subscribers • Benchmark “acceptable” data usage thresholds • Define “all you can eat” data caps • Well above the average user • Define fee structure for data overages

  19. Service Definition: Internet Access (I) • Develop acceptable use policies • Prevent use of the network for illegal purposes • Rationalize unintended (but abusive) bandwidth consumption behaviors • Examples: • Meter data usage for all subscribers • Benchmark “acceptable” data usage thresholds • Define “all you can eat” data caps • Well above the average user • Define fee structure for data overages …More than 98 percent of high speed Internet users will not experience any changes… …You will be charged $10 for every incremental 50 GB of usage beyond your plan…

  20. Service Definition: Internet Access (2) • Application aware service attributes • Favor specific application types • No content discrimination!! • Recognizable marketing attributes • And, of course, speed • Consider data usage caps in service definition • Examples • Telecommuter • High data usage caps • High upstream speeds, low contention • Scheduled high speed backup off loads • Video streamer • High download speeds, low contention • High data usage caps • Gamer • Moderate usage caps • Low latency

  21. Some more data… Overall Network Data - Conventional Wisdom • High speed service = High data consumption • Majority of top consumers also have higher speed services

  22. Some more data… Overall Network Data – Unconventional Wisdom • Same data consumption regardless of speed • Overall DS GB consumption does not vary with DS speed • So what drives data consumption?

  23. Subscriber Behavior Patterns • OTT Video Subscriber Behavior • Subscriber 1 • Max rate: ~ 5 Mbps • Dominant use: OTT Video • Data consumption: ~ 120GB • Subscriber 2 • Max rate: ~ 1.4 Mbps • Dominant use: OTT Video • Data consumption: ~ 120GB • Are they having the same quality of experience?

  24. Subscriber Behavior Patterns • Telecommuter Behavior • Subscriber 1 • Dominant use: VPN • Sustained US rate • Subscriber 2 • Dominant use: VPN • Sustained US rate • Daily uploads at midnight • Are they having the right quality of experience?

  25. Behavior Based Services • Address Subscribers Needs • Video Streamer service • Higher DS speed service • No data cap • Additional monthly charge • Telecommuter service • Higher US speed service • Live view into bandwdithw consumption • Access to premier support system • Additional monthly charge

  26. Behavior Based Services • Harness The Power of the Access Network • Know your customer • Develop real time subscriber 360-dashboard • Account information • Monthly data consumption – (hourly breakdown) • DS/US weekly rate charts (hourly breakdown) • Dominant application use • Relation of devices in the home • Make dashboard readily available • Use every engagement to sell the right service to each customer • Drive customer loyalty • Offer services that meet their needs • Make all relevant information available to subscriber • Use live and historical data to quickly troubleshoot service issues

  27. Focused Marketing • Increase ARPU based on tight service market fit • Correlate behavior with actual service package • Speed – Application – Data Consumption • Identify customers with poor service experience • Reach limits multiple times a month • Market and sell right services to right customers

  28. The Service Provider Opportunity

  29. Deliver Outstanding Customer Service • Software tools: Flow Analyzer • Comprehensive views of network utilization • Endpoints, services, ports, interfaces • Non-intrusive: no hardware/software probes • Live data analysis and DVR capabilities • Automatic profiling of “normal” network activity • Advanced report generation • Subscriber facing network monitoring • Independent of the access network equipment

  30. Deliver Outstanding Customer Service • Instant visibility into subscriber activity • Comprehensive view of application activity on the network • Real-time visibility… to the second • Removes guesswork from problem solving • See the problems when they are occurring • Real time or scheduled recordings File Sharing (*) Email Spammer (*) Unsecured WiFi (*) Multiple video streaming Constant email activity Bit Torrent (*) Graphics generated using Compass Flow Analyzer in access networks from a variety of North American CSPs

  31. Summary

  32. Summary • Subscribers’ use of the Internet is very sophisticated • Many applications and devices • Video is the dominant application • Unprecedented stress on network capacity • “All you can eat” services do not meet subscribers’ needs • High quality of experience is expected for specific applications • Speed is no longer the only important attribute • You must know your customers • Software applications harness all data from the access network • Collect, analyze, present • Develop behavior based services • Address subscribers needs • OTT video consumers - Remote workers - Online gamers • Deliver outstanding customer service • Leverage software applications

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