Cost savings exercise
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Cost-Savings Exercise. AFIX Technical Workshop Session 2. Outline of Content. What technical realities drive cost changes? A tool for understanding in detail ISP Models Scenarios Exercise: Using a modelling tool to explore possible scenarios and their cost-savings implications.

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Cost-Savings Exercise

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Cost savings exercise

Cost-Savings Exercise

AFIX Technical Workshop

Session 2


Outline of content

Outline of Content

  • What technical realities drive cost changes?

  • A tool for understanding in detail

    • ISP Models

    • Scenarios

  • Exercise: Using a modelling tool to explore possible scenarios and their cost-savings implications

AFIX Technical Workshop: Session 2


What technical realities drive cost changes

What technical realities drive cost changes?

  • Handling local traffic today

  • Option A: Bypassing ISPs

  • Option B: Bi-lateral peering

  • Option C: The IXP

AFIX Technical Workshop: Session 2


Cost savings exercise

Handling local traffic today

Global ISPs

International bandwidth (expensive)

M2

S4

S3

S4

L1

Local ISPs

User A

User B

AFIX Technical Workshop: Session 2


Cost savings exercise

Handling local traffic today - another variation

Global ISPs

International bandwidth (expensive)

M2

S4

S3

S4

L1

Local ISPs

user A

user B

AFIX Technical Workshop: Session 2


Cost savings exercise

Option A: Bypassing ISPs

Global ISPs

International bandwidth (expensive)

M2

S4

S3

S4

Local ISPs

L1

Local dedicated line (cheaper)

user A

user B

AFIX Technical Workshop: Session 2


Cost savings exercise

Option B: Bi-lateral peering

Global ISPs

International bandwidth (expensive)

Local ISPs

M2

S4

S3

S4

L1

Local dedicated lines (cheaper)

user A

user B

AFIX Technical Workshop: Session 2


Cost savings exercise

Option C: The IXP

Global ISPs

International bandwidth (expensive)

Local ISPs

M2

S4

S3

S4

L1

IXP

Local dedicated lines (cheaper)

user A

user B

AFIX Technical Workshop: Session 2


Cost savings exercise

Option C: The IXP – another possibility

Global ISPs

International bandwidth (expensive)

Local ISPs

M2

S4

S3

S4

L1

IXP

Local dedicated lines (cheaper)

b

user A

user B

AFIX Technical Workshop: Session 2


Spreadsheet isp models

Spreadsheet: ISP Models

  • Divided into segments based on international bandwidth (Mbps)

  • Variable (green shaded area): Bandwidth per ISP

  • Global variables:

    • Cost of international bandwidth ($/Mbps/month)

    • Cost of local bandwidth ($/Mbps/month)

    • Average % of traffic that is local

    • Standard local bandwidth increment (Mbps)

    • Fee to participate in peering, per ISP per year

AFIX Technical Workshop: Session 2


Scenario spreadsheets

Scenario spreadsheets

  • Uses data from ISP Models worksheet

  • 4 possible scenarios for comparison

  • Indicate # of ISPs of each size that are in your market.

  • Indicate # of those ISPs who choose to participate in an IXP

  • Change any global variables to suit your market

AFIX Technical Workshop: Session 2


Scenarios keys to interpretation

ISPs who dominate already keep much of their local traffic local (% internally routed traffic). This traffic will not go through an IXP in any case.

Savings come from converting (old) international Mbps to (new) local Mbps.

Costs come from the new local lines and sharing operating costs for the IXP.

Scenarios – Keys to Interpretation

AFIX Technical Workshop: Session 2


Exercise

Exercise:

AFIX Technical Workshop: Session 2


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