Top 4 Macro Trends Driving Evolution of the Internet March 10, 2014 – Austin, TX #SXSW

Cory von Wallenstein Chief Technologist @cvwdyn

Pg. 2 Macro Trends Driving Evolution of the Internet @cvwdyn #dynmmt

Trend 1

User experience is the new

competitive differentiator.

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$3.2B  

$2B+  

$3.5B+  

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2010: 58% of US consumers

h"p://cvw.gs/amex2010  

would  pay  a  higher  price  if  they  had  a  strong  expecta>on  of  receiving  superior  service.  Consensus  around  9%  op6mal  premium.    

2012: 66% of US consumers

h"p://cvw.gs/amex2012  

would  pay  a  higher  price  if  they  had  a  strong  expecta>on  of  receiving  superior  service.  Consensus  around  13%  op6mal  premium.    

Pg. 5 Macro Trends Driving Evolution of the Internet @cvwdyn #dynmmt

From 2010 to 2012: The  number  of  folks  who  voted  for  superior  service  

with  their  wallets  went  from  57%  to  75%.  

Businesses  are  responding.  

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Why would you switch banks? A  slightly  more  beneficial  interest  rate  isn’t  

compelling  to  go  through  the  hurdles  of  switching.  Give  me  a  mobile  experience  so  I  don’t  have  to  call  or  

go  to  a  branch.  

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Speed == $$$ 100ms = 1% lost sales (Amazon)

0.5s = 20% traffic drop (Google) h"p://cvw.gs/amz-­‐latency  

h"p://cvw.gs/ggl-­‐latency  

h"p://cvw.gs/km-­‐latency  

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Superior Experience More Value

Stakes are Raised How  will  this  affect  

the  Internet?  

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How  will  this  affect  the  Internet?  

Growth  of  net  new  Internet  users  is  far  away  from  the  original  backbone  of  the  Internet  (growth  is  in  APAC,  Africa,  

South  America).  

Urban  centers  are  more  network  congested  than  ever  before.  

Content  and  apps  will  push  further  to  the  edges  of  the  Internet  to  deliver  excellent  experiences.  

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h"p://www.cogentco.com/files/images/network/network_map/networkmap_global_large.png  

Speed  of  light  299,792.458  km/second  

(in  a  vacuum)  

Theore>cal  RTT  ~40ms  

Real  RTT  ~90ms  

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USA  20ms  20Mbps  

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3.1s  

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Japan  250ms  40Mbps  

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Japan  250ms  40Mbps  

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4.2s  36%  slower  

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South  Africa  400ms  4Mbps  

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7.6s  146%  slower  

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We  can’t  break  the  speed  of  light.    

Customers  can  be  gained  through  superior  service,  but  

slow  is  the  new  down6me.    

We’ll  push  closer  to  the  edge  to  deliver.  

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Trend 2

A Cambrian moment of

innovation ecosystems.

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h"p://cvw.gs/econ-­‐camb  

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Trend 3

Net neutrality and the

evolving business model of

the Internet.

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h"p://cvw.gs/giga-­‐nn  

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Trend 4

“Things” outnumber

“people”.

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“People”: ~7B

h"p://cvw.gs/cisco-­‐iot  

“Things” today: ~14B

IPv4 Addresses: ~4B

“Things” 2020: ~50B

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Four Macro Trends Driving Evolution of the Internet 1.  User  experience  is  the  new  compe>>ve  differen>ator.  2.  A  Cambrian  moment  in  innova>on  ecosystems.  3.  Net  neutrality  and  the  evolving  business  model  of  the  Internet.  4.  “Things”  outnumber  “people”.  

Dyn  /delivers/  Internet  Performance  •  Traffic  management  (user  types  “twi"er.com”)  •  Message  management  (user  receives  “file  shared”  email  from  Box)  •  Performance  assurance  (understand  your  Internet  performance)