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Internet Society Board of Trustees President & CEO's Report

Internet Society Board of Trustees President & CEO's Report. L. St.Amour 12 - 13 November 2004 BoT Meeting/ Washington, DC. Agenda. 2004 Forecast Review ISOC’s Strategic Positioning 2005 Draft Budget for Discussion IETF Administrative Restructuring Budget Request 2005 - 2008 Projections

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Internet Society Board of Trustees President & CEO's Report

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  1. Internet Society Board of TrusteesPresident & CEO's Report L. St.Amour 12 - 13 November 2004 BoT Meeting/ Washington, DC

  2. Agenda • 2004 Forecast Review • ISOC’s Strategic Positioning • 2005 Draft Budget for Discussion • IETF Administrative Restructuring Budget Request • 2005 - 2008 Projections • Strategic Retreat Output - Sept. 2004 (for ref.) BoT 2005 Budget -Nov 04.ppt

  3. Internet Society Board of Trustees2004 Year-end Forecast 12 November 2004 BoT Meeting/ Washington, DC

  4. Key Operating Goals 2004 President’s Operating Goals • Cash reserves >= 4 mos. Op. Expenses • Revenues and Surplus >= Budget • With VP’s, build effective Pub Pol Initiative. Priority on WSIS • CEO executes effective review mechanism for PIR to ensure bid commitments are met • CEO w/ Membership Dir. will update Org. member fundraising program w/focus on effectively involving Trustees in fund-raising • Plan/decision for INET 2005 by Sept. ‘04 and participate in min. 4 regional conferences • With Mem. Dir. & VP’s implement new Member program and system • Support IETF in Admin. Restructuring efforts All Goals largely on track - although tracks not as smoooth as one might like. BoT 2005 Budget -Nov 04.ppt

  5. 2004 Budget Summary • Investment year for IETF, significant increase in funding expected over 2003 + $862K • Year to begin re-building education base and increase policy efforts. • Upgrade many parts of ISOC’s infra-structure in order to support new activities/projects • Modest surplus budgeted ($102K) but net asset and cash position expected to be healthy at end 2004 BoT 2005 Budget -Nov 04.ppt

  6. 2004 P&L Summary through Sept. ‘04 BoT 2005 Budget -Nov 04.ppt

  7. 2004 Year-End Projection Note: Additional 2004 contribution from PIR not yet agreed. BoT 2005 Budget -Nov 04.ppt

  8. Org. Member Revenue Trends Organization Members - Cash In not Accruals Platinum program introduced in 2000 to pay RFC & past due A/P Historical Runrate 2000 Peak 5 new Gold members, then 3 bankrupt Traditional Organization revenues <------- Internet Bubble -----> <-Dotcom crash-> BoT 2005 Budget -Nov 04.ppt

  9. Expenditures by Pillar - 2003Total: $2.3M BoT 2005 Budget -Nov 04.ppt

  10. Expenditures by Pillar - 2004 BudgetTotal: $3.6M BoT 2005 Budget -Nov 04.ppt

  11. 2004 P&L Summary - Revenues • P&L Budgeted surplus was $102K, forecast = $388K due to expected increase in .org program funding of $500K. • Org Member & Ind. Member revenues were behind budget by $366K - Largely due to weak economic conditions, & reduced staff effort available for fundraising(addressed through addition of new membership Director, David McAuley) • Platinum revenues behind budget by $50K. Sida Platinum fund bal. from ‘03 is expected to be used for ‘04 projects. • SEINIT- behind budget by $88K- project got late start, therefore, not able to recognize as much income in ‘04 as projected (but expenses were also delayed). Activities will be rolled into 2005 as will funding. BoT 2005 Budget -Nov 04.ppt

  12. 2004 P&L Summary - Expenses • Total Expenses = ($381K), largely due to delay in use of the IETF restructuring funds although RFC Editor funding increase of $66K offset this somewhat. Careful management of G&A and postponing new hires also contributed. • G&A expenses = ($97K) largely due to PIR extending their stay in ISOC offices $55K and decreased depreciation of $42K, due to later installation of new membership/finance system. • Pub. Pol. Travel & Prof. Services .-increased $51K due to increased policy initiatives including WSIS & WGIG. Promotions exceeded budget by $34K largely in support of ISOC’s first Annual Report. • IM/Chapter support exceeded budget by $147K due to implementation of new membership/finance system & increased efforts to support Chapters, however this is just a redirection of staff costs and not a net increase. BoT 2005 Budget -Nov 04.ppt

  13. ISOC Total Net Asset Trends - 2004 BoT 2005 Budget -Nov 04.ppt

  14. Internet Society Board of Trustees ISOC’s Strategic Positioning 12 November 2004 BoT Meeting/ Washington, DC

  15. Intro • The Trustees met in Reston Virginia for several days in September 2004, to develop consensus on ISOC’s strategic priorities going forward • Those priorities were the starting point given to the CEO, to develop a budget proposal for ISOC (for 2005) assuming: • ISOC will continue as a home of standards process • ISOC will continue to promote the Internet • Priorities were collected together to create list of operational objectives • Note: Presentation from Retreat included in back-up section BoT 2005 Budget -Nov 04.ppt

  16. 2005 Operational Directives for Consideration • Develop diverse, stable, sustainable revenue streams • Meet or exceed Org. member revenue budget • Stronger Value proposition for Org. members, IM’s and chapters • Support IETF’s Administrative Restructuring efforts • Strengthen Public Policy efforts (inc. WSIS, WGIG, etc.) while developing a long-term strategic context and plan • Strengthen PIR relationship and our review processes • Education Strategy - inc. conferences, seminars, etc. • Strengthen & empower IM/Chapter Model & increase interaction/involvement between chapters and ISOC on all matters listed above • Develop a multi-year Publications Strategy & Plan • Develop a multi-year Communications Strategy & Plan • Support changes to BoT Governance model BoT 2005 Budget -Nov 04.ppt

  17. Opportunities are Upon Us…. • There are NOW too many operational directives to be managed in an ad-hoc or opportunistic way (despite fact that very judicious use of these tactics kept ISOC alive the last few years). • Must make conscious, informed, forward looking decisions that build the ISOC of the future. • And as we’ve seen, with so many areas in play, and finite resources, competition increases for those resources. BoT 2005 Budget -Nov 04.ppt

  18. Principles assumed in Budget Dev’t. • Guard against laissez-faire decision making given additional funding available. • Must have consistent linkage and alignment of operating plans with our strategic direction, and our priorities. • All activities should be leveraged fully • Overall ISOC context is important in each funding decision. • Clear that now is the right time to re-new a multi-year strategic operating plan and align it with a thoughtful and purposeful set of activities BoT 2005 Budget -Nov 04.ppt

  19. Launch or continueprojects becauseeach one looks like“a good thing forISOC to do” Put everything onhold while we spendsix months gazingdeeply into theISOC navel Ad-hoc assemblyof loosely-related“good” activities Strategic planningas an endin itself “Do” versus “Plan” OUR GOAL and BASIS for BUDGET: Consistent linkage &alignment of activities(stds, policy, ed/train) Quick response topresent (and rapidlyevolving) realities BoT 2005 Budget -Nov 04.ppt

  20. Strategic Operating Plan Activities • Collective process in which all of ISOC must be involved • Lyman Chapin engaged end October; not arriving with a prepared “here’s what I think you should do” answer • Scope is all of ISOC—standards, policy, education and training • Talk with a very broad range of Internet, public policy, civil society, etc. people • Distill & discuss with Staff and Board • Presentations at regular intervals • Develop strategic operating plan with enough detail to ensure it is ‘implementable’ • Some 2005 budgeted activities will be shaped as plan develops over the next few months (see “do no harm”) • 2006 budget process to be driven by completed (and approved) strategic plan BoT 2005 Budget -Nov 04.ppt

  21. First, Do No Harm • ISOC reputation for non-partisan probity is an extraordinarily valuable (and possibly unique) asset • It’s also a very fragile asset • Once lost, the “we’re just doing this for the good of the Internet” reputation is hard or impossible to recover • Balance urgency of initiatives (narrow window for ISOC to establish position or authority) against potential harm to eventual (but soon!) consistent ISOC operational strategic plan BoT 2005 Budget -Nov 04.ppt

  22. Internet Society Board of Trustees2005 DRAFT BUDGETfor DISCUSSION 12 - 13 November 2004 BoT Meeting/ Washington, DC

  23. Major Budget Process Notes • PIR’s expected contributions are included here at a high level. Note: PIR will not finalize their 2005 budget until early December, so these numbers are projections only. • IETF Projections are largely based on 2003 and 2004 operating costs, with assumptions changed as appropriate. They represent a request from the IESG and IAB and are expected to be reviewed in depth once the model is more established - likely to be Q1 2005. BoT 2005 Budget -Nov 04.ppt

  24. 2005 - Financial Goals • Agree financial metrics with PIR, for PIR, to establish multi-year expectations vs. series of one-off negotiations • Develop multi-year high level rolling budget • 2005: Cash on hand forecasted to be approx. 2 - 3 months vs. goal of 6 months cash on hand given add’l. requirements. Note: 2006 goal = 6 mos. Cash on hand vs. operating commitments - Note: this may also be a stretch • Healthy surplus that will contribute to a more positive cash and balance sheet position BoT 2005 Budget -Nov 04.ppt

  25. 2005 Budget - for Discussion Cash On hand: $ 511,317 Notes: 1 - see detail on later page 2 -Total Salary costs = $1.9M w/ G&A of $331K, plus direct salaries from pillars BoT 2005 Budget -Nov 04.ppt

  26. 2005 Budget - Governance & G&A BoT 2005 Budget -Nov 04.ppt

  27. Org. Member Revenue Trends Organization Members - Cash In not Accruals Platinum program introduced in 2000 to pay RFC & past due A/P Historical Runrate 2000 Peak 5 new Gold members, then 3 bankrupt Traditional Organization revenues  Internet Bubble   Dot com Crash  Economic Recovery

  28. Individual Membership now Increasing w/Associate Membership Members Associate Members 14802 6,804 5,272 618 BoT 2005 Budget -Nov 04.ppt

  29. Security Expert Initiative (SEINIT)Overview • SEINIT, a two year project funded by European Commission and Swiss Govt. • Defines new security models and policies to address the new issues of the pervasive computing world • Implemented over IPv6 infrastructures • Results would be inputs for European or Swiss national initiatives BoT 2005 Budget -Nov 04.ppt

  30. SEINIT members • Alcatel • BT - British Telecom plc • ENST - Ecole Nationale Supérieure des Télécommunications • IABG - IABG mbh • ISOC - Internet Society • KYOS - KYOS SARL • TELS - Telscom A.G. • THC - Thales Communications S.A. • T –NOVA - Deutsche Telekom AG • TRT - Thales-TRT UK Ltd • UCL - University College London • UMU - University of Murcia • WIT - Waterford Institute of Technology BoT 2005 Budget -Nov 04.ppt

  31. BoT 2005 Budget -Nov 04.ppt

  32. BoT 2005 Budget -Nov 04.ppt

  33. SEINIT Objectives • Overall objective " Ensure a trusted and dependable security framework, ubiquitous, working across multiple devices, heterogeneous networks, being organisation independent (inter-operable) and centred around an end-user " BoT 2005 Budget -Nov 04.ppt

  34. ISOC’s Involvement in SEINIT • Organize reviews of deliverables • Involving security and networking experts • Interface to IETF for standards • Dissemination & Training • NDSS • NTW’s • Chapters • IETF meetings • Hired Pavan Dhananka part-time as project mgr. for duration of contract BoT 2005 Budget -Nov 04.ppt

  35. Work products of SEINIT • Conceptual issues • Security architecture • Implementation of components and Models • Security assessment platforms • Adaptation & Integration of Applicatons. • Validation • Exploitation & Dissemination • Training BoT 2005 Budget -Nov 04.ppt

  36. SEINIT expected results • New Architecture and Models • New Policies • Guidelines • Proof of SEINIT security concepts • Platform Implementation • Integration of Architecture and Applications • We will organize a more detailed review at future meeting BoT 2005 Budget -Nov 04.ppt

  37. ISOC OrganizationPhase I Restructuring - May 2004 BoT 2005 Budget -Nov 04.ppt

  38. ISOC OrganizationPhase II Restructuring - October 2004 Expect further staff re-alignmentwhen Permanent policy hire is in place. BoT 2005 Budget -Nov 04.ppt

  39. ISOC OrganizationPhase III Restructuring - January 2005 (?) IAOC IETF IAD Addition of IETF Admin. Support Personnel BoT 2005 Budget -Nov 04.ppt

  40. ISOC OrganizationPhase III Restructuring - Q1/Q2 2005 IAOC IETF IAD BoT 2005 Budget -Nov 04.ppt

  41. Expenses - Staff Allocation BoT 2005 Budget -Nov 04.ppt

  42. IETF 2005 Budget Requirements

  43. IASA Acronyms • IASA -- IETF Administrative Support Activity • An organized activity that provides administrative support for the IETF, the IAB and the IESG. • IAOC -- IETF Administrative Oversight Committee • A largely IETF-selected committee that oversees and directs IASA. Accountable to the IETF community. • Includes ISOC CEO and an ISOC Board-appointed member • IAD -- IETF Administrative Director • The sole (or first) staff member responsible for carrying out the work of the IASA BoT 2005 Budget -Nov 04.ppt

  44. How is IASA structure defined? • Proposal is to structure IASA as an IETF-controlled activity under the ISOC legal umbrella • Currently proposed in an individual Internet-Draft authored by Wasserman & Daigle -- the IASA BCP: • http://www.ietf.org/internet-drafts/draft-wasserman-iasa-bcp-01.txt • IETF consensus call underway to pursue this general approach • May be followed by substantial updates to the BCP text to achieve IETF consensus and IESG & ISOC Board approval BoT 2005 Budget -Nov 04.ppt

  45. IASA TimetableNote: currently under revision • Gain IETF consensus for basic approach • Draft-iab-iesg-adminrest-rec, consensus call Nov. 8 • Appoint Transition team to spin-up activities -Nov • Finalize BCP - mid Nov. (likely to change) • Community discussion • Approve BCP - mid Dec. (likely to change) • Community Discussion & IESG Approval • ISOC BoT Approval ( plus additional & TBD approvals) • Seat Initial IAOC Jan/Feb 2005 • Agreements in place - mid 2005 BoT 2005 Budget -Nov 04.ppt

  46. Structure of the IASA • IAOC oversees the IASA • ISOC employee (IAD) responsible for managing contracts to outsource virtually all administrative tasks • Sub-committee of the IAOC (including ISOC President and IETF chair) selects and reviews IAD BoT 2005 Budget -Nov 04.ppt

  47. IASA Finances • Two funding sources • IETF meeting fees 60% during start up • ISOC funds, mostly from organization member fees 40% during start up • Budget is determined annually (and tuned as necessary) by IAD, IAOC and ISOC Board • All financials are completely open and transparent to the IETF community • IAOC has responsibility to make this so BoT 2005 Budget -Nov 04.ppt

  48. IETF Budget request to ISOC • Budget request submitted by IETF and IAB Chairs as part of IASA transition, reviewed by IESG and IAB • More detailed review expected by IASA Transition team as soon as consensus is reached and team appointed. • Further refinement by IAD/IAOC as transition is carried out and unknowns are answered • Assumes steady transition/startup, not crisis • Budget request built on 2003/2004 operating costs as far as known BoT 2005 Budget -Nov 04.ppt

  49. IETF Budget Projections • 2005 Projection - Meeting Fees • Meeting revenue = $2,048 (assuming 1300 attendees/meeting at average $525 reg. fee) • Total Revenues = $2,048 • Total Expenses = $3,278 • Shortfall/Total Request to ISOC: $1,370 • Traditional expenses: $ 902 • Transition expenses: $ 468 • Plus requested 1 trimester of sec’t. reserves be avail. in cash reserves (approx. $250K) through transition. BoT 2005 Budget -Nov 04.ppt

  50. IETF Budget - Expenses • 2005 Projection - Operational Expenses • Meeting costs $1,364 (detail next page) • Secretariat, tools, IAD 940 • Office, fin/legal, ins. 88 (12+60+16) • IETF/IAB discretionary 84 Sub-Total $2,476 • RFC Editor 802 • 2005 Projection - Transition Expenses • Legal & finance $ 40 • Tools devel/updates 100 Sub-Total: $ 140 • Total 2005 expenses: $ 3,418 BoT 2005 Budget -Nov 04.ppt

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