1. Enabling application-aware networks
Jon Alexander, Product Director
Conversant
This document contains proprietary information of Conversant and may not be reproduced in any form or disclosed to any third party without the expressed written permission of a duly authorized representative from Conversant

2. Agenda
About Conversant
Overview of Internet Economy in 2010
Securing a position in the content value chain
A complete delivery solution

3. Company Introduction

4. About Conversant Founded in 2002
Conversant is a Singapore based company with a development team based in Cambridge (UK)
Company focuses on developing products & software services for the telecommunication industry
Conversant has managed to secure leading operators as initial reference customers for our products & services
Conversant is a privately owned company – profitable since our inception and growing rapidly
DP Information Group is Singapore's leading credit & business information bureau.

5. Team of entrepreneurs based in Cambridge, UK
UK Development Team
Team of entrepreneurs based in Cambridge, UK
15 years developing products and solutions for the telecommunications industry:
Zeus
CacheLogic
Velocix

6. Competencies
High performance Internet Infrastructure
Innovative solutions to complex technical problems
Disruptive technologies to address emerging challenges

7. Internet Economy in 2010

8. Internet growth
Internet is growing fast and growth is driven by video.
P2P continues to grow slowly, but becomes a minor percentage of the overall

9. Internet Video Maturing
“…YouTube to be profitable in 2010…”
Patrick Walker, Google Director Partnerships, 5th March 2010
Case study of two of the most innovative video companies behind this growth in video traffic. Examples are US-centric as business model innovation is occurring faster in US than RoW – although global audiences are quick to follow.
YouTube has for a long time been held up as an example of a company with no path to monetisation, having successfully captured eyeballs
However in spite of the massive ongoing litigation with Viacom, Youtube has been able to create deals with major studios and broadcasters, such that according to the NY Times 16% of their content is currently monetised
Forecast revenue in 2010 $1bn – expected to break even.

10. Internet Video Maturing II
“…by every measure, we are now primarily a streaming company that also offers DVD-by-mail.”
Reed Hastings, Netflix CEO, 20th October 2010
Recently Blockbuster the largest video rental company in the US filed for chapter 11, blamed largely on pressure from no.2 Netflix and their failure to capitalise on the opportunity brought about by the Internet.
Netflix is currently generating over 500Gbps of traffic in US, with over 60% of their 18million US subscribers using the streaming service. At peak times Netflix is consuming over 20% of bandwidth in the US – double that used by Google.
These two examples show traditional media being complemented or even replaced by Internet video.

11. Online Advertising
Online advertising remains the fastest growing segment of a flat to declining global advertising industry.
Advertisers are more than happy to spend more money online at a time when their ad budgets are under pressure in traditional print and broadcast media.
Source: IAB/PWC

12. Internet video is big business
What does this tell us?
Back in 2006 the Internet was about low quality home movies that just happened to go viral – 142million views is phenomenal but can not be monetised.
Today Hollywood Majors are using multiple channels on the Internet to promote their big budget ($250m+) pre-release blockbuster films.
People are no longer chasing eyeballs they are focused on monetising the eyeballs that they have now.
Internet Video has grown into a multi-billion dollar industry. The CDN market alone is estimated to be in excess of $2bn. …. And we are still at the tip of the iceberg!!
Internet video is big business

13. The network economy Where are the telcos?
Who are the new players in this “Web2.0” landscape?
Cloud services, device/pc manufacturers, social networks, search providers, content sites and advertising are all present. This is a pretty good representation of the “public” perception of the Internet in 2010.
Even allowing for the US-centric nature of this diagram there is an obvious component of the jigsaw missing – the network operators that carry this data across thousands of miles of fibre and copper.
Source:

14. Video Value Chain Two sided business model
Content Producer
e.g. English Premier League
Two sided business model
Content Distributor
e.g. Canal+
Content Delivery Network
e.g. Limelight Networks
Flat revenues, growing costs
Tier 1 ISP
e.g. Global Crossing
Regional ISP
e.g. Free
Content value chain follows a fairly linear path for most content:
Content producer owns the rights but does not monetise them in most cases, they go to a distribution partner
The Content Distributor might be a broadcaster, online retailer or other content portal.
The distributor uses a CDN to deliver the content on their behalf as the CDN can not only guarantee a decent quality at a reasonable price, but equally important they can provide the security/management functions that are required to comply with rights restrictions e.g. windows or geo-block
The CDN typically buys bandwidth from a few major Tier 1 networks in addition to some local peering relationships that they may have established in their major markets. The Tier 1 provides the benefit of aggregating eyeballs from multiple access networks and can provide very aggressive wholesale pricing
Regional ISPs connect the eyeballs but need to go through Tier 1 networks to get access to the content, except for the peering relationships that they have been able to establish
Finally the end user typically pays a flat monthly fee to their ISP for Internet access
Two areas of concern are exposed in this value chain:
Firstly the Tier 1 network is getting paid on both sides. They get paid to deliver and the ISP pays to receive the content.
Secondly the ISP receives a flat subscription revenue from their subscribers whilst traffic is growing 36% CAGR
End User

15. Where are things heading?
Content Distributor
e.g. Yahoo
Content Delivery Network
e.g. Akamai
Tier 1 ISP
e.g. Global Crossing
Regional ISP
e.g. Free
End User
Content Creator
e.g. end users
Reduced IX costs, Increased OPEX,
Revenue flat
Large CDNs like Google and Akamai are asking ISPs to host their caches for them. This allows them (and the ISP) to bypass the Tier1 networks. The CDN saves the money that it would have previously paid to the Tier 1 and also gets a better quality of service.
The ISP also gets some benefit as it reduces its IX costs at the expense of an increase in OPEX. Overall though this is a good reduction in costs – caching is a very beneficial technology with a very short ROI. But this is only addressing a small percentage of the costs. Don’t forget that about 95% of the costs are internal to the network and not affected at all.
Most importantly the ISP revenues have not changed whilst the ISP has been “dumbed” down into providing a hosting service to allow the CDN to extract more value from their subscribers.
Even worse, with language/cultural/religious barriers, content is becoming increasingly “local”. Even on ‘platforms’ like Youtube the Top 10 most watched videos from one region to another vary hugely. The majority of content is created and consumed within the same country and often the same network – there is no need for a “global” CDN in this case.
Over 80% of video content originates ‘locally’

16. Telco Response
“Traffic is growing,” said the [BT] spokesperson. “The idea that ISPs will continue to pick up the bill is unsustainable. We want to work this out with the BBC and other content owners to come to some real-world compromise.” ZDNet, June 2009

17. Participation in the content value chain
Telco Response
Participation in the content value chain
Many different approaches amongst these global telcos. But single unifying trend is that they are seeking to establish their position in the content value chain by developing an offering that will allow them to increase their value.

18. “Application-Aware” Network

19. Network is the enabler of the Internet Economy
Our Beliefs
Network is the enabler of the Internet Economy
Traditional architectures are inefficient, capital intensive and limit innovation
Existing content value chain does not fairly reflect contribution of each participant

20. Our Mission
To evolve today’s networks to deal with the wave of traffic growth and support the demands of emerging technologies and services

21. Layer 7 Revenue Growth L7: Application L6: Presentation L5: Session
L4: Transport
Cost Growth
L3: Network
Network operators will continue to face increasing costs from growing their network. Traffic will continue to rise and new technologies will place new demands on the network.
Building a better, faster, more efficient network can help an operator control a portion of this cost. But it does not solve the problem. Revenue from internet access is largely is fixed due to the competitive nature of the industry – it is difficult for a provider to command a premium for “better” access as most users can not differentiate and don’t care.
Innovation is occuring at layer 7. Users interact with the network at layer 7 and spend incremenal revenue on layer 7 application services.
Layer 7 provides an opportunity for network operators to join the new “network economy”.
L2: Data Link
L1: Physical

22. Network Operator Opportunity
Services that currently run on top of network can be integrated into the network natively
Content Delivery Services
Web Security
Personalisation
We are not suggesting that network operators should build their own applications, but that they can provide a platform of services that will enable these applications within the “network cloud”
By focussing on enabling layer 7 technologies in their network an operator has the ability to increase the relevance of their network in today’s network economy and generate incremental revenue on top of the Internet access fees that their subscribers pay.
“Local” cloud services

23. A complete delivery solution

24. Conversant Approach
Fundamentally different from other solutions…
A holistic solution for managing all web traffic: CDN + OTT
Local platform, controlled and operated by the service provider

25. SwiftServe is a Telco CDN solution
Built from ground up for telco market
Provides end to end control, management and security
Local infrastructure deployed in network controlled by operator
Complete solution for CDN and OTT traffic

26. SwiftServe EDGE Carrier-grade CDN Web2.0 Media Caching
Microsoft Smooth Streaming
Apple HTTP Dynamic Streaming (iPhone/iPad)
Adobe HTTP Dynamic Streaming
Whole site delivery (HTTP)
Large file delivery (HTTP)
Geo blocking
Content security
Advanced reporting
Cluster Management
Alert Management
Dynamic Filtering
Safe Search
Dynamic Sites
Video seek
GZIP compression
Full Transparent Deployment

27. Telecommunications Organisation SingTel IPTV CDN Requirements
Live streaming & Video On Demand
Description
Delivering high premium content

28. National Broadcaster Organisation MediaCorp CDN Requirements
Live streaming for National Day Rally 2010
Description
Delivering live event for audiences worldwide 28

29. Network Traffic Flow Excessive interconnect traffic
Congestion in core network
Content Owner 1
Content Owner 4
Content Owner 2
Content Owner 3

30. >95% Cache efficiency on CDN traffic
SwiftEdge CDN
SwiftServe
>95% Cache efficiency on CDN traffic
Core network bypassed
Content Owner 1
Content Owner 4
SwiftServe EDGE appliances deployed into the network and Content Owner 4 becomes a CDN customer.
Moves premium content closer to end users, bypassing the congested portions of the network. This provides a better QoE to the content owner (there is a strong benefit for local content owners to move their traffic onto the CDN).
Additionally traffic from Content Owner 4 does not generate interconnect costs as ~95% cache efficiency is achieved. Costs are reduced for the content owner.
Content Owner 2
Content Owner 3

31. SwiftServe CDN + OTT 30-60% savings on general web traffic
SwiftEdge can prioritise outbound traffic
Content Owner 1
Content Owner 4
The same infrastructure can also be used to cache OTT traffic with any spare resources. This means that the ROI can be maximised by making use of any spare capacity on the Edge platform.
Traffic can be DSCP marked to identify CDN traffic vs “best efforts” to allow downstream devices to decide how to handle the traffic appropriately.
Additionally overload bypass prefers CDN traffic to “best efforts”. This means that the Edge infrastructure will always attempt to deliver all traffic with the highest QoE unless resources are constrained, in which case it will prioritise the CDN traffic
Content Owner 2
Content Owner 3

32. SwiftServe
SwiftServe is a fully featured CDN solution that enables new revenue generation opportunities
Operator may deliver their own services e.g. Internet TV
Operator may sell delivery services to content partners
Operator may deliver traffic on behalf of CDN partners in return for revenue share

33. CDN Federation Content Owner
Telco can chose whether to enable federation on their CDN. It allows operator to receive a revenue share for content that would otherwise have appeared as “OTT” and hence a cost to the telco.

34. SwiftServe Portal: Usage

35. SwiftServe Portal: Geographical Spread

36. SwiftServe Portal: Object Management

37. SwiftServe Edge Configuration

38. Traffic Report

39. Singapore : 112 Robinson Road, #03-01, Singapore 068902
Thank You
Singapore : 112 Robinson Road, #03-01, Singapore
Tel: (65) Fax: (65)
United Kingdom: 26 Saint Thomas Place, Ely Cambridgeshire, CB7 4EX, England, United Kingdom Tel: (44) Fax: (44)