GRID COMPUTING AND THE GROWTH OF THE INTERNET ROBERT B. COHEN, PH.D. COHEN COMMUNICATIONS GROUP

CONCLUSIONS b INTERNET TRAFFIC WILL GROW 400 TIMES IN DUE TO THE COMMERCIAL ADOPTION OF P2P APPLICATIONS RELATED TO GRID COMPUTING - 8x MANY OTHER FORECASTS b GRID COMPUTING ADOPTION WILL BENEFIT FROM: –HUGE DECLINES IN THE PRICE OF BACKBONE BANDWIDTH DURING ; WHEN PASSED ALONG TO CUSTOMERS, COSTS COULD DECLINE BY 75% PER YEAR –OPTICAL TECHNOLOGY IN METRO & BACKBONE NETS - THIS NEW TECHNOLOGY WILL ALSO LOWER BANDWIDTH COSTS

P2P FORECAST VS. McKINSEY FOR INTERNATIONAL IP TRAFFIC

DIFFERENT FORECASTS b McKINSEY-JP MORGAN STUDY FINDS THAT TRAFFIC GROWTH IS SLOWING AND WILL DECLINE TO 63% ANNUALLY BY 2005 –RICH MEDIA & STREAMING GROW MOST RAPIDLY b ANDREW ODLYZKO CLAIMS TRAFFIC IS DOUBLING IN THE US ANNUALLY b LARRY ROBERTS CLAIMS TRAFFIC IN US NETWORKS IS GROWING 3X ANNUALLY, SLOWER OVERSEAS b IBM & GRID ADHERENTS BELIEVE PEERED SERVERS WILL DRIVE GROWTH IN THE NEXT MONTHS.

P2P MODEL METHODOLOGY b A DELPHI-LIKE SERIES OF INTERVIEWS WITH NETWORK ENGINEERS AND EXPERTS TO DETERMINE CURRENT & FUTURE TRAFFIC FLOWS b EXPLICIT ADJUSTMENTS FOR PRICE CHANGES, USING A MEASURE OF DEMAND ELASTICITY FOR BANDWIDTH (%  DEMAND/%  PRICE] b MEASURES OF CAPACITY AT THREE POINTS IN TIME FOR MOST INTERNET ROUTES b ADJUSTMENT FOR THE ECONOMIC DOWNTURN

Gbps 1Tbps 10Tbps 100Gbps 10Gbps 100Tbps 100Mbps 1Kbps 1Mbps 10Mbps 100Kbps 10Kbps 100 bps 1 Pbps 10 bps Limit of same % GDP as Voice New Measurements Future Growth Projected at 2–3/year 3/year ARPA & NSF Data to ’95 TDM Voice Traffic ROBERTS’ FORECAST - HISTORICAL AND FORECASTED U.S. INTERNET TRAFFIC Source: Roberts et al., 2002 SOURCE: LARRY G. ROBERTS ET. AL., “INTERNET TRAFFIC MEASUREMENT 2001 AND 2002,” JANUARY 16, DR. ROBERTS IS WITH CASPIAN NETWORKS.

P2P SCENARIO FOR INTERNET GROWTH b GRID COMPUTING BECOMES MAIN DRIVER OF BANDWIDTH USE: INTERNET TRAFFIC GROWS TO 100% BY 2003, TO 150%+ IN –COLLABORATION USED BY FINANCIAL, R&D & DECISION- MAKING DRAW UPON WIDE RANGE OF DATA RESOURCES –SOFTWARE FOR COLLABORATION BRINGS MORE DATA RESOURCES INTO USE, SERVER-TO-SERVER TRAFFIC GROWS AS WELL –CONSUMERS COULD TURN TO COLLABORATIVE CAPABILITIES. THEY WOULD SHIFT SPENDING TO INTERNET TO PAY FOR HIGHER LEVELS OF SERVICES

HOW GRID COMPUTING STIMULATES IP TRAFFIC GROWTH b ENABLE COMMUNITIES (“VIRTUAL ORGANIZATIONS”) TO SHARE RESOURCES AS THEY PURSUE COMMON GOALS b NEW APPLICATIONS ENABLED BY THE COORDINATED USE OF GEOGRAPHICALLY DISTRIBUTED RESOURCES E.G., DISTRIBUTED COLLABORATION, DATA ACCESS AND ANALYSIS, DISTRIBUTED COMPUTINGE.G., DISTRIBUTED COLLABORATION, DATA ACCESS AND ANALYSIS, DISTRIBUTED COMPUTING b PERSISTENT INFRASTRUCTURE FOR GRID COMPUTING E.G., CERTIFICATE AUTHORITIES AND POLICIES, PROTOCOLS FOR RESOURCE DISCOVERY/ACCESSE.G., CERTIFICATE AUTHORITIES AND POLICIES, PROTOCOLS FOR RESOURCE DISCOVERY/ACCESS b ORIGINAL MOTIVATION, AND SUPPORT, FROM HIGH-END SCIENCE AND ENGINEERING RAPIDLY EMERGING COMMERCIAL INTEREST IN INDUSTRY “PEER-TO-PEER” AND OTHER SECTORSRAPIDLY EMERGING COMMERCIAL INTEREST IN INDUSTRY “PEER-TO-PEER” AND OTHER SECTORS SOURCESSOURCE: CHARLIE CATLETT, “GLOBAL GRID FORUM: A PRIMER,” March

TRAFFIC GROWTH COMPARISON b JP MORGAN-McKINSEY FORECASTS –55 TIMES GROWTH IN IP TRAFFIC, »0.5 EXABYTES IN 1999 TO 11.4 EXABYTES IN 2005 –60%-65% GROWTH IN 2005 AND AFTER b P2P SCENARIO FORECASTS –400 TIMES GROWTH IN INTERNATIONAL IP TRAFFIC, EXCLUDING THE US (US GROWTH IS USUALLY HIGHER THAN GLOBAL) »78 PETABYTES IN 2001 TO 31 EXABYTES IN THIS WOULD ASSUME THE US IS 80% OF TOTAL WORLD IP TRAFFIC IN 2001 –<100% GROWTH , 100% GROWTH –150% GROWTH FOR A MORE COMPLETE PRESENTATION OF THE P2P FORECAST, SEE MY FORTHCOMING ARTICLE IN AMERICA’S NETWORK

CONTRASTS IN TRAFFIC FORECASTS b P2P FORECAST HAS TRAFFIC GROWTH REBOUNDING, AVERAGING OVER 150% b MORGAN-McKINSEY HAS TRAFFIC SLOWING TO ABOUT 60% ANNUALLY

CONTRASTING THE McKINSEY STUDY WITH A P2P FORECAST b THE McKINSEY STUDY FORECASTS THAT VIDEO STREAMING AND VIDEO FILE TRANSFERS (VIDEOCONFERENCING, MOVIES) WILL ACCOUNT FOR MUCH OF THE INTERNET’S GROWTH TO 2005 AND BEYOND. –THE VIDEO TRANSFERS ARE MOSTLY INTERNAL TO INDIVIDUAL FIRMS. THEY DON’T PUT A BIG LOAD ON DATA BACKBONES. b IF P2P AND S2S DRIVE GROWTH, TRANSFERS CAN BE WITHIN AND BETWEEN FIRMS –ACCESS TO DATA RESOURCES BECOMES MORE IMPORTANT TO BUSINESS. RESOURCES SHIFT TO SUPPORTING THIS. –INNOVATIVE MIDDLEWARE AND APPLICATIONS SPUR ADDITIONAL GROWTH.

CONTRASTING P2P SCENARIO WITH THE McKINSEY ANALYSIS b WITH RAPID GROWTH OF GRID COMPUTING, P2P & S2S TRAFFIC ACCOUNTS FOR NEARLY 90% OF TOTAL INTERNET TRAFFIC IN 2008 b IN McKINSEY, P2P & S2S ARE 69% OF TRAFFIC IN 2005 (P2P IS 80+%) b IMPLICATION: IF COLLABORATION SUPPORTS THE GROWTH OF RELATIVELY LOW COST BROADBAND, SERVICES MIGHT BE DELIVERED AT MUCH LOWER COST VIA END-TO-END NETWORKS. b IMPACT: MACHINES SUBSTITUTE FOR LABOR. BIG PRODUCTIVITY GAINS!

McKINSEY-JP MORGAN FORECAST FOR INTERNET TRAFFIC b JP MORGAN-McKINSEY - TRAFFIC GROWTH WILL SLOW TO ABOUT 60% PER YEAR BY 2005: –NOT MANY NEW APPLICATIONS –EDGE CARRIERS & BUSINESS CUSTOMERS GAIN CONTROL OVER PRICING, ISPs LOSE REVENUES TO EDGE PLAYERS –IP REVENUES GROW BY 30%-35% ANNUALLY –IN 2005, CONTENT DISTRIBUTION NETWORKS & HOSTING ACCOUNT FOR 66% OF TOTAL REVENUES, CONNECTIVITY/BACKBONE: 34% –BACKBONE PROVIDERS MOVE INTO HOSTING TO BIND CUSTOMERS TO THEMSELVES, BUT ULTIMATELY FACE STRONG COMPETITION FROM IT OUTSOURCING FIRMS

BROADER CHANGES SUGGESTED BY P2P FORECAST b IN P2P, COLLABORATION CHANGES HOW BUSINESSES & CONSUMERS PAY FOR THE INTERNET –KEY SERVICES SAVE MONEY & TIME, SHIFT SPENDING TO THE INTERNET –AS A RESULT, RATHER THAN LOSING STRENGTH, THE SURVIVING ISPs GAIN FROM CHARGING FOR ADDITIONAL SERVICES INCLUDING COLLABORATION, PAYMENTS, ETC. b IF ISPs FIND A WAY TO PROFIT BY SELLING TRANSPORT & SERVICES. –TELECOM SECTOR REVIVES BASED ON CHARGING FOR NEW RANGE OF DATA SERVICES - PRICING IS BASED ON VALUE-ADDED FORMULA RATHER THAN OFFERING DATA TRANSPORT AT COMPETITIVE PRICE