1ISM 50 - Business Information SystemsLecture 19Instructor: John MusacchioUC Santa CruzDecember 2, 20102Class announcementsFINAL EXAMMonday December 6Time: 7:30-10:30pmReview SessionsWed Dec 1, 20105:00PM to 6:45PMThimann 003Fri Dec 3 20105:00PM to 6:45PMNat Sci Annex 1013Some Typical TopologiesHome NetworkDSL Modem TelephoneLineRouterEthernet Switch(to localOffice)4Small/Medium BusinessRouterwith FirewallT1 LineT1 ModemEthernetSwitchWeb Site ServerTo LocalOffice5ISP TopologyTelephone CompanyLocal OfficeLocal LoopTelephoneSwitchLocal LoopLocal LoopDSL ModemDSL ModemDSL ModemDSLAMLeasedLine to NAPToTelephoneNetworkISP Point of Presence6Network Service ProviderNetworkAccessPointNetworkAccessPoint7Large E-BusinessCustomersMerchandiseOrdersDatabasesApplication ServersWeb ServersLoad BalancerIncoming HTTPRequestsPresentation Logic(AssemblingWeb page)LogicFlow ofInteractionInterconnectedwith Gigabit Ethernet orother technology8Web Caching Speed up web page loading by storing previously seen components locallyhttp://www.ucsc.eduCache on Hard DriveWebserver9Akamai Case 10Akamai CaseIn Class Discussion1) How does Akamais content distribution network differ from web caching?2) In what ways was the tech-bust of 2001-02 bad for Akamai? In what ways was it helpful?3) How did EdgeSuite differ from Freeflow?4) Why would marketing EdgeSuite be different than marketing Freeflow?11Internet Bottlenecks First Mile (Server Capacity) 70% of website performance problems according to one study Backbone Plentiful, but some shortage within metropolitan areas Peering Exchange of traffic between NSPs Last Mile to home56 K modems are slowShared LAN limitations12Solutions Expand Bandwidth Being done Mirroring web citesPut exact copy of same web page to multiple servers Tricky to duplicate content CachingProblem: Stale Content Problem: Hard to count click throughs Content Distribution Networks14Freeflow Deployed in 1999 Akamai Infrastructure13000 servers in 954 networks by 2001 Customers Large Commercial Websites Revenue model - $2000 per mbps served(For comparison, normal Internet access cost 500 mbps at time) 152000 Financials $196 Million Loss (Before special charges) $90 million revenue %20 gross margin, after deducting server depreciation payments to network partners Data center spaceBut, most expenses of shouldnt grow at same rate as number of customers, so margin should improve $201.5 million SG&A (selling general and administrative) (largely sales force cost)Again, this might not grow at same rate as the number of customers. $40 million R&D16Competition Hosting firms (substitute)Exodus Other CDNsSandpiper, Adero, Mirror Image Content AlliancesAkamais competitors banded together to share networks172001 Market ChangesBad Dot-coms bust Customers leave churn rate goes to 22% per quarterGood Hosting firms go bust (exodus) Some CDN competitors go bust. Competing CDN alliances mired in problems19EdgeSuite Assemble dynamic pages at edges rather than just serve heavy objects Value propositionPerformance improvementCost and complexity reductionScalabilitySecurity Pricing higher than old service Soon edge suite dominated revenue20TechnologyDynamic CDN technology: ESI (edge sides includes)Develop as open standard why?Akamai not big and credible enough to force a de-facto standard on market21Marketing Difference in selling old vs new products:Old product Geared toward speeding up websites Revenues of their clients depended on speed Easier to get saleNew Product Simplify company IT function Cost vs. revenue center Harder sell. More data drivenConsequently new product needs more professional sales force Channels?Distribution Partners (IBM) credibilityDirect Sales Force too22Recent Performance23Chapter 9Applications and the Organization24Build vs. Buy?Purchase off the Shelf+ less time and cost+ benefits of using a standard solution+ support available- must mold org to app- no potential for competitive advantageOutsource-developers not as familiar with org as you+ more opportunity for customizing than off the shelf- contractor may share knowledge with competitors- contractor may have too much bargaining powerMake+ most customizable of 3+ easier iteration between conceptualization and development needed- most risky- org may lack competency to do
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