Frequently Asked Questions and Answers

What kind of research is this?

This is a study, not (just) a report. We captured data, constructed a model,
tested the model against additional data, and wrote a report about the findings.
This is very different from merely collecting data points, analyzing them, and
writing a report, because the model allows us to create “what-if” scenarios and
projections and can be modified on an ongoing basis as we’re provided with
increasingly accurate data. The model reflects the best available data provided
by independent third parties and publicly-available documents (such as financial
statements from service providers and equipment vendors), but also includes the
ability to be modified as new data emerges that may affect the outcome.

Why is this study unique?

Nemertes model is unique in that it’s the only one that looks at both user
demand and capacity, and assesses them independently. More importantly, it is
the only study that looks at user demand prior to the point at which that demand
is translated into Internet traffic.

There are a few reputable studies that assess actual Internet traffic by
looking at data that travels across the “core” of the Internet or across peering
points (most typically, Andy Odlyszko’s). These are meaningful and useful (in
fact, we validated our model against this data to verify its accuracy) but they
suffer from a fundamental limitation: They measure only the traffic that has
been able to make it onto the Internet in the first place. If, as our research
indicates, that traffic is constrained by access limitations and throttled back
before even reaching the core, then information about what’s happening on the
core doesn’t reflect what users are actually trying to do. In fact, a slowdown
in core traffic could reflect anything from a true decrease in user demand to a
situation in which the access is constraining the core—either could be the case.

What does this study say will occur?

We predict that if current trends continue, Internet access capacity will
become insufficient to handle demand as early as 2010. But it’s important to
understand that we’re not saying this will ocur. The model is an “if-then”
model. We plug in assumptions and generate outcomes, but the outcomes depend on
the assumptions. We validated the assumptions against the best available data to
ensure that our model delivers reasonably correct outputs against known data (ie
the past) but when it comes to the future, it does not saying that anything
“will” occur. If current assumptions and data are correct, the outcome will be
such-and-such. Obviously, a lot can change between now and 2010. The recommended
investment in access bandwidth could occur, thus heading off performance
declines, for example. Or we could receive better data that we could use to plug
into the model and refine its results.

How does Nemertes fund its research?

Our model is that we have a base of clients who subscribe to our research and advisory services. Our clients include users, makers of, and investors in, technology. Specifically, they include the IT departments of Fortune 200
enterprise organizations, vendors and service providers, not-for profits,
financial services firms/investors, and a couple of publications. We base our insights on best practices which we uncover while conducting our benchmarks (for more on the benchmarking process, read here: What We Do.
Clients pay to have access to our data, our insights, and us--our data comes
from the research projects that we choose to undertake, based on our own best judgment on what makes sense. Again, the cost is shared across a portfolio of players who have diverging agendas, a range of interest levels in any individual topic, and most importantly do NOT have line-item veto (or rights of approval) on our topic selection, process, methodology, or findings. All of our clients have exceedingly different agendas, which generally conflict with each others'. Our role is not to serve any one agenda, but rather to provide objective data that can be used by all.

Is this a commissioned study?

No. Commissioned studies are works for hire in which the commissioning agent
owns the data and controls the distribution of the findings. Nemertes retains
all rights to the study and, as with all its research findings, distributes the
research to all its clients.

What were the goals of the research? Did you have any preconceived
expectations?

Nemertes set out to arrive at a defensible estimate of current and projected
Internet traffic. To do so, we compared the current and projected Internet
infrastructure and investment in an attempt to arrive at a “user-friendly”
metric to assess the impact of new traffic on current and projected
infrastructure.

Did you model the study to obtain a desired outcome?

No. Nemertes did not set out to prove an agenda with this project and
the analysis is explicitly agnostic with respect to politics and economics.
There was no agenda or presumed outcome behind the research.

Now that you have completed the study, do you have any recommendations for
changes in policy?

Setting policy is out of scope for us and our organization. However, as
researchers, we came away with the overwhelming conviction that there is a deep
industry need for better (more comprehensive and accurate) data in this area.
The Internet is almost opaque to serious researchers, even those with the
technical skills, integrity and desire, for the simple reason that carriers and
content providers refuse to reveal their inner workings. This is often for very
good reasons, but it’s detrimental to the industry. So we conclude the report by
urging content and service providers to cooperate with researchers in sharing
data in a way that can benefit all.

Where did the data sources come from?

We relied on a handful of key sources for our data:
* research data collected by academic organizations such as CAIDAand MINTS
* publicly-available documents, including vendor/service provider financials
* confidential interviews with enterprise organizations, equipment vendors,
service providers, and investment companies. During the course of this project we spoke with 70+ individuals and organizations for these interviews, and we relied on our base of several hundred IT executives who participate in our enterprise benchmarks.

Who conducted the research?

The study and data are the work of Nemertes analysts. Nemertes has the sole
rights to the study and can license distribution of the report to interested
clients should they desire.

How did you create the model?

To assess infrastructure capacity, we reviewed details of carrier
expenditures and vendor revenues, and compared these against market research
studies. To compute demand, we took a unique approach: Instead of directly
modeling user behavior based on measuring the application portfolios that users
had currently deployed, and projecting deployment of those applications in
future, we looked directly at how user consumption of available bandwidth has
changed over time.

How did you validate against the data?

We anchored the model at a few points in time for which we have solid (or relatively solid) data. We then “predicted” what the other data points should have been, and where the data and model disagreed, we modified the model.

A linear growth rate for access capacity seems low. Why is that? Did you consider the growth in wireless access?

We did consider the growth in wireless access as currently projected. The challenge with access capacity is that it's gated not only by technology, but also by the cost and effort of installing cabling, cell towers, etc. That's what results in a linear, rather than exponential, growth.

Won't technology fix the problem? Moore's Law appears to apply to switching and routing capacity--why not to access capacity?

See above. Moore's Law does indeed appear to apply to switching and routing capacity, but access capacity is gated by the physical deployment of media (wireless, wired, fiber, etc.) And, according to the best available data, access capacity has been growing linearly, not exponentially, over the past 7 years. Although it's not impossible that we'll see an exponential growth rate in access capacity at some point in the future, the data strongly suggests that we are not seeing exponential growth now. So, no, technology alone won't fix the problem.

Comments and Discussion

To comment on the study, or to supply us with additional, enhanced data points,
please go to the live discussion.

We welcome substantive
feedback, discussion, and debate and will seek to answer as many additional
questions as possible.

Comments will be moderated for tone only (no ad-hominem, no vulgarity), not for content.