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Key Drivers

 

     
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The key drivers of IP network with QoS
   

 
The Internet/IP network market is complex, with many forces affecting its course. However, from the viewpoint of the relationship between profitability and performance issues, three market developments stand out as key drivers:

·         Multimedia traffic explosion:

In the communications arena, voice and fax over the Internet are now demonstrating dramatic cost savings. Through the performance-boosting efforts of companies such as Intel and Microsoft, multimedia applications, including 3-D animation and audio/video streaming, have become an integral part of PC architecture, driving both public and private networks rapidly toward a diverse and challenging traffic mix. Many are real-time multimedia applications, which may also be interactive, demanding better than the current “best-effort” IP network that treats all traffic equally.

·         Migration of business traffic:

The migration of business traffic from private to public IP networks may even be a more critical driver than multimedia traffic, e.g., VPN. Enterprises are interested in taking advantage of the public network - especially IP networks - to reduce expenses and operational complexity, as well as to provide improved connectivity to customers, business partners, and employees. Before this happens, businesses will want to see that the IP network’s inherent performance/reliability issues are addressed.

·         Concerns on profitability:

The rapid and unexpected growth of the Internet has created intense competition among Internet service providers (ISPs), pushing margins extremely low in the traditional IP services market. It is very difficult, if not impossible, to create a successful business model based on a low monthly flat-rate pricing structure. To improve this picture, service providers are now striving to find new sources of revenue to improve their margins.

Moving business traffic - primarily data, but also IP-based voice traffic - onto public IP networks is one of the major new sources of revenue identified by service providers in recent years. A major prerequisite for attracting business customers’ mission-critical traffic is to offer alternative IP-based services with guaranteed quality of service (QoS), and using QoS sensitive pricing structure, rather than best effort IP service with flat-rate pricing structure.

By implementing IP QoS solutions, ISPs can achieve:

·         Profitability

Improving top-line revenues by attracting high-margin business customers and offering higher-priced levels of services, while reducing bottom-line costs through using bandwidth more efficiently;

·         Competitiveness

Enhancing service differentiation by offering multiple classes of better-than-best-effort service and by offering customized solutions based on individual requirements.
   
 

 

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Last modified: July 13, 2016

 

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