Developing Customer Broadband Profiles

Last week I was the moderator of an IoT panel at NTCA’s IP Vision 2017 conference. The panel discussion took an interesting turn when the conversation turned to how small ISPs can monetize the IoT.

Customer demand for connecting devices is contributing to the need for bigger broadband pipes. Today there are about 6.6 billion IoT devices connected in the world. This is expected to grow to 22.5 billion by 2021. Obviously not all of these devices will be going into homes since there is a big growth also with industrial and agricultural IoT. But households will be steadily adding more connected devices.

One of the panelists works at a western telco and his company recently started considering the idea of profiling data customers to help them right-size broadband. The company first profiled employees to see how the idea would work. When the panelist was profiled he guessed that his household had 15 connected devices. But then he went home and did an inventory and was surprised to find that he actually had 55 devices. His household is probably a little unusual in that he has five kids and he loves technology, but he said that every telco employee had the same experience in that they underestimated how many connected devices they had in their home. It turns out for most households that the Internet of Things is already here to some degree.

His company has gone on the monetize this idea. They offer customers the chance to sit with a technician and to create a profile of how they use broadband. The goal is to determine if the customer has enough broadband to do everything they want to do. They immediately found the same thing I hear everywhere – most customers have no idea of how much broadband they really need. It turns out that most customers almost reflexively buy the lowest cost and lowest bandwidth data product and are then unhappy with some aspect of its performance.

Telcos everywhere are telling me that customer complaints about poor performance of broadband are becoming commonplace. It’s been easy to assume that problems are mostly due to issues associated with WiFi. But the experience of this particular telco shows that the problem is often that a customer has not purchased enough broadband to satisfy their needs. After the consultation, if they need a faster connection this telco gives the customer the larger data pipe free for a month – and so far not one customer has reverted to their old slower connection.

The telco also offers a second related product that is getting good traction. They sell what they call managed WiFi. The product starts with making sure that customers have placed WiFi routers in the most effective places. But the real benefit to customers is that they can call the company when they are trying to connect a new IoT device to their network. This is something that often frustrates customers. When customers find out that the telco can easily connect new devices and can help them manage their devices a large percentage of customers are buying this new product.

Within the industry we all understand that customer demand for broadband continues to grow at the torrid rate of doubling every three or four years. This kind of exponential growth surprises almost everybody. Customers that have been happy with a 10 Mbps broadband product invariably are going to need to move to something faster within only a few years. But customers are slow to realize that degraded service is due to their own increased usage and they often blame the ISP for broadband issues.

The broadband profiling has shown this telco that the customer experience varies widely. For example, not everybody needs faster download. They have a number of seasonal homes that are starting to install remote cameras that exceed the upload capacity of the broadband products, and the company can make sure there is enough broadband to satisfy the upload needs. The telco says their customers really appreciate this custom approach.

Looking Into the Future

Alexander_Crystal_SeerYesterday I presented at the South Dakota Telephone Association annual conference, with the topic being ‘A Glimpse into the Future’. In this presentation I talked about the trends that are going to affect the telecom industry over the next 5 – 10 years as well as the broader technology changes we can expect to see over the next few decades.

These are topics that I research and think about often. A lot of this blog looks at telecom trends and technologies we can expect to see over the next five years. And once in a while I indulge myself in the blog and look at the future of other technologies. Researching this presentation was fun since it made me take a fresh look at what others are predicting about our future.

I am an optimist and my research tells me that we are living at the most amazing time in mankind’s history. There is so much groundbreaking research being done in so many different fields that the announcement of new technology breakthroughs will become commonplace during the next decade. Barely a day goes by already that I don’t see the announcement of a new technology or scientific breakthrough.

I don’t think the average person is prepared for how fast the world is going to soon be changing. The last time that the world underwent such a dramatic shift was at the beginning of the 20th century when we were introduced to electricity, cars, telephones, radios and airplanes. We are about to be hit with a tsunami of innovations far more numerous than that last big wave of change.

It’s hard for the mind to grasp the idea of exponential growth. Over the last forty years our technology has been dominated by a single exponential growth curve – the continuous growth of the speed and density of the computer chip. This one change has brought most of what we think of as modern technology – computers, the smartphone, the Internet, the cloud and our broadband and telecom networks. Anybody working in any field of electronics has been blessed for a long time by knowing that they would be able to produce a new version of their technology every few years that was faster, cheaper and smaller.

What is amazing about today is that there are numerous new technologies that are at the early stages of the exponential growth curve – and all happening at the same time. Just looking at the list of these technologies is exciting – robotics, advanced machine language (artificial intelligence), nanotechnology, alternate energy, super materials, genetics and medical research. As these technologies progress we will soon be inundated with breakthroughs in all of these areas. It’s mind-boggling to envision which of these technologies will dominate our lives in a decade or two, and it’s even harder to think of how these various technical trends will intersect to produce things we can’t imagine.

What is even more exciting is that this is not even the whole list, because there are a lot of other technology trends that might become equally important in our lives. Such trends as the Internet of Things, the blockchain, natural language computing, or virtual reality might have a big impact on many of us in the very near future. I will be discussing some of these future trends over the next few months and I hope some of my readers share my enthusiasm about what is coming over the next decade or two.

I don’t usually use this blog to promote myself, but I am interested in talking to other associations and trade groups about the many topics I cover in this blog. You can contact me at blackbean2@ccgcomm.com if you are interested.

Thinking Exponentially

Exponential GrowthWe are at an interesting point in human history where there is rapid growth in a number of different areas that are all having or will soon have a profound impact on society. And by rapid growth I am talking about exponential growth, because most people assume that even fast growth is straight-line and linear.

Most things around us grow over time with linear growth, which is growth done at a consistent rate. But exponential growth happens with a repeated multiplication of the rate of growth. Linear growth results in straight-line growth while exponential growth results in explosive growth.

An example of exponential growth is the old Chinese story about a man who did a favor for an emperor and asked to be paid in rice. He wanted one grain the first day, two grains the second day, and so on for a month. The emperor though this sounded like a great idea until a few weeks into the process it became clear that he would soon be paying with all of the rice in China.

We’ve had a few examples of exponential growth in the US economy in the past. Consider the growth of televisions in households. These went from being in a very few homes in the late 40’s until practically every home in the country had a TV by the mid-50s.

We have one example of exponential growth in the broadband industry which is that the growth in the amount of data downloaded by the average home, which has been doubling roughly every three years since the late 80s. And we’ve seen the result of this growth manifested by the quickness with which any new broadband technology gets overwhelmed and obsolete within a relatively short time after hitting the market. Consider DSL. When we all got our first 1 Mbps DSL connection it felt extravagantly fast. I remember talking about how wonderful it felt to have a T1 in my house. But that excitement faded quickly when within a few short years that DSL felt inadequate.

The human mind does not easily grasp the idea of exponential growth. I’ve seen this many times with network planning. Engineers will plot out expected network growth linearly and will increase the size of the data electronics on a network only to find out, often within a very short time that the new facilities are full and overloaded. Exponential growth almost always surprises us.

We are now sitting at a time when there are a number of examples of exponential growth happening in different technology areas. Ray Kurzweil was one of the first to identify the impact of exponential growth in today’s world back in 2006 in his book The Singularity is Near. In that book he discussed five paradigms in the computing world that had grown exponentially in the 20th century: electromechanical, relay, vacuum tubes, discrete transistors, and integrated circuits.

Kurzweil has made very good predictions about the last decade and has made the following predictions about the next few decades:

  • Within a decade from now solar power will generate the majority of the world’s electricity;
  • By the late 2010s, glasses will beam images directly onto the retina. Ten terabytes of computing power (roughly the same as the human brain) will cost about $1,000.
  • By the 2020s, most diseases will have been cured by nanobots in our blood stream. Computers will easily pas the Turing test. Self-driving cars will be the norm and people won’t be allowed to drive on highways.
  • By the 2030s, virtual reality will begin to feel 100% real. We will be able to upload our mind/consciousness by the end of the decade.
  • By the 2040s, computers will be a billion times more capable than biological intelligence. Nanotech will enable us to make food out of thin air.
  • By 2045, people will be able to multiply our intelligence a billionfold by linking wirelessly from our brains to the cloud.

These predictions are all amazing and speak about a near-future world that is very different than today. But what they speak about even more is the power of exponential growth. In order for these predictions to be realized there needs to continual exponential growth in the fields of computing, artificial intelligence, biological sciences, etc.

How Fast is Your Data Traffic Growing?

exponential-growth-graph-1I saw a quote recently from Jeff Finkelstein, the chief of the networks at Cox Communications, who said that the data demand on his networks was growing at 53% per year. I would hope that the managers of most large networks can cite their growth statistics.

There has been a metric in the industry that residential data usage has been doubling about every three years. This metric has roughly held true since the early dial-up days. Year after year people download more than they have the year before.

But it’s easy for us to lose sight that the bandwidth that people and businesses use for getting to the web is only a piece of the bandwidth usage on an ISP network. There are two other big uses of the networks that are growing faster than Web usage. We are seeing the first real growth in traffic from the Internet of Things, but the fastest growing contributor to web traffic right now is machine-to-machine (M2M) traffic.

M2M is when devices talk to each other. One example would be programs that automatically back up things to the cloud. PCs and cellphones now routinely send data to and from the cloud without any specific action by the user. The proliferation of storing data and using programs in the cloud has exploded the M2M usage.

The expected increase in M2M traffic is staggering as more and more things move into the cloud. In 2015 so far the average M2M traffic worldwide is about 50 terabytes per month. By 2018 that is expected to grow to over 900 terabytes per month. And while IoT traffic is relatively small right now, it is starting to grow rapidly as well.

Finkelstein says that the only way for his company to keep up with this fast growth is through the use of software defined networks (SDN). Cox uses SDN today to identify segments of traffic to route everything as efficiently as possible. He says that the company can isolate things like children’s traffic from parent’s traffic from business traffic and route each differently.

Just a few years ago there was a proliferation of peering arrangements established at companies like Cox. They created direct peering connections with companies like Google. But peering is getting more complicated and the goal for a large company is to peer with the major clouds – the Google cloud, the Amazon cloud, the Microsoft cloud etc. And that is where SDN comes into play to help route traffic as efficiently as possible to save on transport costs and to cut down on latency.

What this means for the small ISP is that the rate of growth of overall data traffic is accelerating. The 53% annual growth number would have seemed like an unbelievable number five years ago. For anybody not preparing properly the effects of that level of exponential growth can catch up to any network in a hurry. If Cox’s 53% growth is sustained they will have 5.5 times more traffic five years from now than they have today.

I don’t know how many network operators are planning ahead for that kind of growth. Certainly every network is seeing growth even if it’s not at quite the speed Cox is seeing. Traffic on rural networks is probably not growing quite as quickly as the Cox network, but it is still growing rapidly.

The major issue for most network owners will be to keep an eye on the various choke points in your network to understand where more data is going to cause you problems in the near future. Choke points can exist at many different places in the network from the backbone data pipes down to neighborhood nodes. And keeping all parts of your network  ahead of demand is going to require capital spending to upgrade electronics.

 

 

The Second Machine Age

**HANDOUT IMAGE, MANDATORY CREDIT, NO TRADE, NO SALE**I just finished reading The Second Machine Age: Work, Progress and Prosperity in a Time of Brilliant Technologies by Erik Brynjolfsson and Andrew McAfee. These are two MIT professors who looked at a topic that I have written about often in this blog – the accelerating speed of everything related to computers and what that might mean for society.

The call it the second machine age and define the first machine age starting with the invention and implementation of the steam engine. That was the invention that created the first industrial revolution and changed the world in myriad ways. They say that we are on the cusp of the same kinds of changes due to everything that is going to come out of the development of computer technology.

This book was preaching to the choir with me and I have talked about a lot of the same trends in this blog. But these guys went out and talked to many of the technology innovators to make sure that what they were seeing was real and so this book is basically an affirmation of the idea that the exponential improvements in computer technology – chip speeds, memory, download speeds, size of components – is going to soon change the world in drastic ways.

We have already seen a lot of changes in our daily lives due to computers and the changes have been very spectacular, from the growth of PCs through a ubiquitous Internet. But the relentless improvements that are being made in the underlying technology due to the doubling of performance every few years is going to result in changes that are almost hard to believe.

Years ago I worked for Control Data, one of the two companies along with Cray, that developed the first supercomputers. What most people don’t realize is that your smart phone has far more computing power than the Cray-1, the best-selling supercomputer of the late 1970s and that machine was huge and required a ton of power to operate and cool.

Most people fail to grasp the nature of exponential growth. If computers and the related technologies double in power / speed / capacity every 18 months, then by 2025 the computers we use will be 64 times more powerful than the ones we use today (which is also true of today compared to 2005). But carry that out 19 years and the computers of 2033 will be over 8,000 times more powerful than those of today. That is a mind-boggling number. And there is no end in sight for this growth. Scientists and engineers have continued to find ways to improve all aspects of computer technology. I just reported last week on a new storage technology developed by IBM that is 100 times more efficient than the best memory today.

It is the sheer power of the computing in the near-future that is going to reshape the world in the same way that the steam engine changed the world a few centuries ago. The authors postulate that while we have all lived through the doubling of computer power for a few decades, the things that computers are capable of today are still within our mental grasp. We are just now starting to see some applications with processing big data that are starting to do things that were unimaginable in the past. For instance, we can sequence your genome in a few minutes now and tell you all sorts of things about your current and future health. Computers will soon be able to drive cars and converse easily in any language and act like the universal translator of Star Trek. Through sheer processing power computers can now enter a new environment and make the same sort of assessment as to what is there as a human. And who knows what they will be able to do in ten or twenty years.

The authors call this a revolution because it’s going to change a lot of paradigms that we are used to. For examples, computers are likely to take over any job that is repetitive in nature, and that doesn’t mean just factory line jobs, but things like writing news articles, analyzing requests form bank loans, handling packages. All sorts of jobs will likely disappear over the next two decades because machines are far more economical than people.

What nobody knows is if there will be new jobs created to replace those missing jobs. The authors think that there will be a period of decades where the replacements won’t happen and that the old worry that robots will replace us will become reality for a lot of people. In the book they cite Eastman Kodak and an example of how this might happen. The whole photo industry with its hundreds of thousands of jobs was displaced in a very short time by digital cameras and finally by online photo sharing services like Instagram. They believe industry after industry will implode as there are better economic alternatives due to computerization.

This book is not looking out at a distant future like at the end of this century, but instead is predicting widespread changes and disruptions to the society starting a decade from now. The book holds forth some exciting possibilities of the things that will be available in our futures. But it also paints a scary picture of the possibility of displacing a large chunk of humanity from the workforce. As a society we need to start thinking about these changes now, because they are going to be here a whole lot sooner than most people think.