# NANOG: graphs: return on investment

###### NANOG 08 feb 98 1400 kc presentation

NLANR return on investment analysis

9 feb 98

nlanr cache pi: Duane Wessels
wessels@nlanr.net
data analysis: Alex Rousskov
rousskov@nlanr.net

It is the mark of an educated mind
to rest satisfied with the degree of precision
which the nature of the subject admits
and not to seek exactness
where only an approximation is possible.

--Aristotle

 return on investment (bandwidth)

# cache or not to cache: small ISP

1. ISP charged uniformly for outbound bandwidth.

2. ISP always has unsatisfied demand for bandwidth (customers `waiting')

3. income proportional to available bandwidth (new customers same income than old)

4. Squid on mid-size unix box can support 50 requests/s, 3.9 Mbps, or 2 T1s

5. constant byte hit ratio sustainable

# cache or not to cache: small ISP

1. ISP earns monthly income of \$X.

2. saving bandwidth can allow ISP to admit new customers, generate more income

3. question: will investment in proxy equipment and supprt pay off and when?

goal: find Y (in months) such that:

income_with_caching(Y) >= income_wout_caching(Y)

(note: income_with_caching(0) = - equipment_cost, so initially ISP loses money)

with I = total monthly income without caching (current bandwidth)

Y*(I + I*BHR) - equipment - Y*cache.admin== Y*I
solve for Y

# cache or not to cache: small ISP

## realistic parameters per T1

squid cache boxcost = \$10K
equipment = boxcost / 2 (pipes);
cache.admin = \$25,000 / 12 (months)

# cache or not to cache: small ISP

y
-axis: number of months per T1 (1.5MBps)
ISP with monthly income (2 T1s, no cache) of \$32K and sustained hit ratio of 25%
would double its investment in about 2*6=12 months
(2 connections, 6 = 25%: double curve (x=32))

 return on investment (time)

NLANR supercache latency savings:

average hit saves US about 1 sec, European users ~2 sec
total (crude) NLANR supercache savings in response time:
( sec_saved_per_hit * #hits )

assume investment of 1 hour/day (365 days/yr) to monitor cache hierarchy

profit: time saved so far

ROI = (profit - investment) / investment

9 feb 98, alex/kc, info@caida.org.

## Related Objects

See https://catalog.caida.org/media/1998_nanog9802/ to explore related objects to this document in the CAIDA Resource Catalog.