On the Evolution of the Internet Economic Ecosystem

Abstract: The evolution of the Internet has manifested itself in many ways: the traffic characteristics, the interconnection topologies and the business relationships among the autonomous components. It is important to understand why (and how) this evolution came about, and how the interplay of these dynamics may affect future evolution and services. We propose a network aware, macroscopic model that captures the characteristics and interactions of the application and network providers, and show how it leads to a market equilibrium of the ecosystem. By analyzing the driving forces and the dynamics of the market equilibrium, we obtain some fundamental understandings of the cause and effect of the Internet evolution, which explain why some historical and recent evolutions have happened. Furthermore, by projecting the likely future evolutions, our model can help application and network providers to make informed business decisions so as to succeed in this competitive ecosystem.