[Nsp-qos] Re: best effort has economic problems

[Vicky Rode]

interesting reading....


http://mail.internet2.edu:8080/guest/archives/qbone-arch-dt/log200205/msg00000.html


regards,
/vicky

Edward B. Dreger wrote:
> GC> Date: Sat, 29 May 2004 16:53:17 -0400
> GC> From: Gordon Cook
> 
> 
> GC> The point I am making in my report is NOT that the best
> GC> effort network has technology problems but rather that it has
> GC> ECONOMIC PROBLEMS.  That it might support 2 or 3 players not
> GC> 2 or 3 HUNDRED.
> 
> Best effort is cheaper to provide.  Cheaper sells.  Is there
> enough of a market to sustain premium services?  IP-based VPNs
> haven't replaced FR and PtP WAN links, but FR and PtP haven't
> thwarted IP-based VPNs.
> 
> 
> GC> That until companies begin to go chapter seven and vanish,
> GC> the best effort net will be a black hole that burns up
> GC> capital because, for many players, the OPERATIONAL expense is
> GC> more than they get for bandwidth never mind cap-ex.
> 
> Definitely true about opex and capex... but I'm not convinced
> that QoS is the magic bullet that will make the marketplace big
> enough and profitable enough.  I don't see service offerings
> fixing the woes of screwball pricing.
> 
> 
> GC> best effort won't go away.  many best effort players will.
> 
> If all best effort players provided QoS/guaranteed services,
> would the survival rate be significantly higher as a result?
> 
> 
> GC> for the time being, best effort bandwidth prices as an
> GC> absolute commodity cannot sustain networks over the long
> GC> haul.  A network that can deliver QoS the report hypothesizes
> GC> may be able to attract enough revenue to become profitable.
> 
> That's where I'm not convinced.  Current IP delineates the lower
> reliability boundary and a benchmark price point.  Premium
> services won't have a lower cost than best-effort, so they must
> sell for more.  Would the incremental service improvements be
> high enough to draw customers away from cheap BE _and_ support
> "sufficient" margins?
> 
> First class hasn't stopped the cycle of airline bankruptcies and
> government bailouts.  I don't see "first class data" as much
> different.
> 
> 
> GC> How to to this my group is still discussing.  We don't
> GC> pretend that QoS is easy or any kind of mature collection of
> GC> technologies, but increasingly it looks as though the
> GC> industry, if it is ever going to be self sustaining, really
> GC> needs to look at QoS services and solutions.
> 
> Perhaps, but only if the price is right.  DSL sells better than
> Internet T1 lines, which sell better than end-to-end private
> lines and packet clouds.  There's a reason for that.
> 
> 
> Eddy
> --
> EverQuick Internet - http://www.everquick.net/
> A division of Brotsman & Dreger, Inc. - http://www.brotsman.com/
> Bandwidth, consulting, e-commerce, hosting, and network building
> Phone: +1 785 865 5885 Lawrence and [inter]national
> Phone: +1 316 794 8922 Wichita
> _________________________________________________________________
>           DO NOT send mail to the following addresses :
>   blacklist at brics.com -or- alfra at intc.net -or- curbjmp at intc.net
> Sending mail to spambait addresses is a great way to get blocked.
> 
>