Cost per prefix [was: request for help w/ ATT and terminology]

William Herrin herrin-nanog at dirtside.com
Sun Jan 20 17:22:34 UTC 2008


On Jan 20, 2008 9:46 AM, Patrick W. Gilmore <patrick at ianai.net> wrote:
> On Jan 20, 2008, at 6:06 AM, William Herrin wrote:
> > On Jan 19, 2008 11:43 PM, Patrick W. Gilmore <patrick at ianai.net>
> > wrote:
> >> On Jan 19, 2008, at 12:55 PM, William Herrin wrote:
> >>> There was some related work on ARIN PPML last year. The rough
> >>> numbers
> >>> suggested that the attributable economic cost of one IPv4 prefix in
> >>> the DFZ (whether PI, PA or TE) was then in the neighborhood of $8000
> >>> USD per year.
> >>
> >> I haven't seen that work, but I am guessing this number is an
> >> aggregate (i.e. every cost to everyone on the 'Net combined), not
> >> per-
> >> network? See, I'm just looking at that TWO BILLION DOLLARS PER YEAR
> >> number and thinking to myself, "um, yeah, right". :)
> >
> > Patrick,
> >
> > That was a worldwide total, yes. The cost per prefix per router is
> > obviously only measured in cents per year.
>
> I think you mean in tiny fractions of a single cent per router per
> year

No, I don't. The lower bound for that particular portion of the cost
analysis is easy to calculate:

Entry level DFZ router: $40,000
Stacked 1U layer-3 switches with similar switching capacity and port
density: $10,000
Difference between the two: The switch stack can't handle the DFZ prefix count.
Cost delta (attributable to the DFZ prefix count): $30,000
Expected lifespan in the DFZ of an entry-level router: 3 years
Prefixes in the table: 245,000

Calculation: The LOWER BOUND for the cost per prefix per router can be
calculated as:
( [entry level router's cost attributable to prefixes]/[expected
lifespan] ) / [DFZ prefix count]
($30,000/3)/245,000 = $0.04 per router per year, i.e. 4 cents.

Bear in mind that 4 cents per year is a LOWER BOUND. It costs AT LEAST
4 cents per router per year to carry one prefix in one DFZ router.
There are also routers in the DFZ which cost $500,000 where much more
than $30,000 is attributable to the prefix count.


>.  While there are 27K ASes ($0.30/year/AS, remember?), there are
> many more routers which carry a full table.

Yes, there are many more routers than ASes. In my original analysis on
ARIN, I estimated that there were some 200,000 routers carrying a full
table in the DFZ. The consensus at the time was that the number was
closer to 150,000 than 200,000. 150,000 times 4 cents yields a LOWER
BOUND economic impact of $6,000 per prefix per year, $1.5B overall.

Again, that's a lower bound on the estimate. The upper bound is
perhaps twice that with the highest probability cost around $8,000 per
prefix per year.


> Comparing cisco & Juniper's annual revenue to the cost of a prefix is
> like comparing Ford & GM's revenue to the cost of bulbs in
> headlights.  Hell, most of cisco's revenue is not even related to
> routers doing a full table.

Of course not. However, it makes a good sanity check on the cost
estimate: If the costs attributable to prefix count sums to more than
their revenues then there must be an error in the math. My point was
that the $8000/prefix/year estimate passes the sanity check with
plenty of room to spare.



> > The thread started here:
> > http://lists.arin.net/pipermail/ppml/2007-September/008927.html
> > It was originally an argument of about the cost of doing PI for IPv6,
> > which according to Cisco product literature consumes twice the amount
> > of space in the FIB as routes for IPv4.
>
> Anyway, thanks for the link.  I must be missing something seriously
> important to the calculation.  Perhaps it includes things like human
> time to upgrade equipment or filters or something?  I'll see how the
> calculation was put together.

Nope, just the numbers you see in the link. I didn't calculate cost
increases due to manpower,  cost reductions due to equipment reuse
after its DFZ lifespan, or other factors for which data is sketchy and
the likely impact to the analysis is small.

Like I said: read the thread, critique the numbers and then add them
up for yourself. A prefix is surprisingly expensive. If it wasn't,
folks wouldn't be so concerned about the rising prefix count.

Regards,
Bill Herrin

-- 
William D. Herrin                  herrin at dirtside.com  bill at herrin.us
3005 Crane Dr.                        Web: <http://bill.herrin.us/>
Falls Church, VA 22042-3004



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