A revenue-based model for making resource investment decisions in IP networks

Abstract

Capacity planning is a critical task in network management. It identifies how much capacity is needed to match future traffic demand. It directly affects customer satisfaction and revenues. In this work we present a network usage analysis tool called Dynamic Netvalue Analyzer (DNA), which helps alleviate a big problem that network engineers and marketing executives face - making optimal resource investment decisions. Marketing executives have to project customer growth while network engineers have to project traffic volume based on the entire customer population. DNA helps the prediction process by presenting actual network usage data from a business perspective, in a form that is useful to both network engineers and marketing executives. Using these projections, decisions on how to upgrade resources can be made. We show that information from DNA can be used to: (1) quantify revenue earned on each link; (2) quantify return-on-investment on performing a link upgrade; and (3) quantify the loss due to customer dissatisfaction when a link is not upgraded. We also illustrate how these formulations based on business information can be used to improve capacity planning decisions.