PlusNet: Going for the Gaming Niche
In the suburban densely populated areas of the UK, broadband competition is red hot and the pricing extremely aggressive. It is hardly surprising therefore that we are starting to see the more advanced thinking ISPs starting to target market niches.
One niche that has always existed since the start of the internet, is geographically dispersed, extremely tech-savvy and would obviously benefit from a specialised service, is the hard-core online gaming community. Plusnet have designed a product just to serve this communities needs.
As at Mar 2007, OFCOM estimated that 32% of UK Broadband population participated in online gaming: with 12.4 residential broadband customers that is nearly 4m gaming homes in the UK. Obviously, not everyone plays games frequently enough to consider a specialised service, but PlusNet estimate their target market at 400k or 10% of the overall gamers.
If we consider this market size against the SME market which is the other preferred ISP target niche which OFCOM estimates has 600k subscribers, we can see that the size of the Gaming opportunity is significant.
Product Design
Obviously in online gaming, speed of response from the server to console/ PC is vital. Absolute speed is measured by latency and is transparent to gamers by just typing a simple command “ping games.server.name” from their PC. Therefore, no ISP can hide their performance from gaming customers.
The biggest issue for gamers is when ping times are not stable and vary wildly. Obviously if a game server or PC is heavily loaded and performing badly, ping times deteriorate and this is outside of the control of the ISP. But more often than not, ping spikes are the fault of the network and are caused by heavy network load.
The two obvious ways for a network to avoid these spikes are to either build huge capacity for everyone, including people who are possibly using applications where near real time responses are not vital – this is uneconomical. Or, prioritise the applications which require fast responses – this is the approach of PlusNet.
Packet Inspection
I very rarely read in general forum broadband users applauding ISPs for installing Packet Inspection Equipment on their networks, however this type of equipment does have an upside. Packet Inspection basically means that Internet Traffic is tagged and put in an ISP defined stream according to the application. In normal uncontested hours this is irrelevant apart from the couple of extra milliseconds that it takes for the packet inspection process and streaming to occur. However, when the network is congested the “important” streams are prioritised and the “less-important” streams are de-prioritised.
Personally for me, I expect my internet voice calls to work perfectly 24x7 even if it downgrades my browsing experience slightly and really I can’t be that bothered if my ftp download of a 10-meg file takes double the time. However, and this is a big, if congested hours run to most of the evening or my browsing experience takes forever or my ftp speed is really slow, I have a big problem. In other words for me, some traffic shaping at peak times is acceptable, blatant overloading of the network is not. Plusnet have a rolling 24-hour view of the application traffic on their network which highlights the peak hour loading issue perfectly.
Plusnet are very transparent about their traffic management policies and ascribe the highest priority to voice (voip) and gaming traffic. It is interesting that the VOIP services mentioned in the gaming release are the gamers favourites, Ventrilo and Teamspeak, and not the one’s which generate the most amount of publicity, eg Skype and GoogleTalk, even though these are prioritised as well.
In order to prioritise traffic, Plusnet must have a dedicated team continuously analysing application signatures and programming the deep packet inspection equipment - in the plusnet network the DPI kit is Ellacoya’s (pdf)
I would guess that most games publishers would be eager to help Plusnet, especially now they are part of BT, prioritise their traffic whilst others software vendors, especially in the P2P and Binary Newsgroup fields, are less helpful. It is a well-know fact that some vendors go about cloaking and encrypting their applications in order to avoid being managed by a ISP. The Ellacoya platform can currently identify some encrypted applications, but I guess we are in the middle of a long running cat and mouse game which will probably go on for many decades to come.
My own personal opinion is that based upon the economics of broadband some form of traffic shaping and prioritisation is inevitable on ALL networks - even all the unbundled networks especially as they start to become loaded and even one day fibre networks. I would rather signup to an ISP who are transparent in their policies, rather than charlatans who hide behind vague legalistic gobbledygook.
Interleaving
Interleaving is a common form of error correction used in computer science going back many years before broadband was even invented. Obviously, because it relies on analysing blocks of data rather than individual elements, it adds delay or latency or increases ping times in all uses. On the positive side, it reduces higher level stack errors and reduces the chance of a line dropping in an DSL broadband environment.
Interleaving, I am led to believe, adds on average 20 milliseconds of latency and therefore a lot of gamers want it turned off. Plusnet offer this option to the users – it is even self provisioned from the internet.
The key here is “self-provisioning” which makes it economical for the ISP to offer this service – no calls to the call centre, no signing onto Openreach systems – a simple API request generated by the customer. Most ISPs have not made this type of investment in their online support/ self-provisioning platforms and more especially automated the links to OpenReach on the backend. This is an ongoing investment as Openreach platforms and functionality change frequently. I suspect this is going to be a key ISP differentiator in the future.
Hosted Game Servers
Some Games allow ISPs to place Game Servers in the core of their network, thereby reducing the number of hops for Gamers and thereby improving performance. Although, Plusnet are not currently advertising these, I know for a fact they have some PC and PS3 gaming servers on beta.
Urban Myth #1: All Gamers are Bandwidth Hogs
One of the reasons I have heard from some ISPs why they don’t actively pursue gamers is that they consume above average amounts of bandwidth and therefore are not very profitable to serve comapred to your average homeowner browsing the web and periodically downloading some spam (sorry emails). This may well be true, but I have always believed the low bandwidth user will nearly always decide on price and therefore go with the mass market ISPs.
Plusnet kindly provided me with the following data:
Of course, time is also on the Plusnet side with more and more people in the UK signing up for online game – the heavier early adopters will soon be outweighed by the lighter long tail.
Urban Myth #2: Gamers are Whingers who cost a fortune in Support.
This is a much harder myth to dispel, especially if the source is an ISP who offers p*ss-poor service. This type of ISP will generate support problems from across the base and not just from Gamers. The problem for these types of ISPs is that Gamers are harder to fob off with some non-answer.
Support is going to be a crucial battlefield going forward for the ISPs and I have never spoken to anyone who thinks they have gotten it right. To be fair to Plusnet with their online portal and transparency, they appear to me to try harder than the rest. I doubt many ISPs have online call queue and performance statistics.
Of course, this openness gives the press ammunition to have a field day when the fat-fingered monster of Plusnet strikes. Plusnet have had severe problems with email services in the past, but it would be churlish of me to joke about the sorry sagas here.
Urban Myth #3: Gamers do not Use Email.
I couldn't resist ;-)
Other Gaming ISPs
I’m sure there are a few out there on the net, the one that I keep hearing about is Jolt who seem to be well regarding the gaming community. I believe Jolt was formed as a spin-off from Nildram and still uses its network. Nildram was of course bought by Pipex who have just been purchased by Tiscali. Tiscali will need to keep its eyes on the ball if it is to see off the forthcoming threat from Plusnet.
Finally
I believe targeting niches is the way forward for smaller ipstream based ISPs – gaming is a perfect reasonable sized niche to build a differentiated service.
A lot of ISPs are trying to gain market share in the SME market which again offers the opportunity for differentiation and big value with products for home workers, VPN and hosting services. The business market has the double bonus of not only usually having a higher ARPU, but also a different time of day usage profile to the residential market.
One big niche for which I not yet seen a satisfactory solution is the richer rural home with long line lengths and therefore poor connection speeds. There must be plenty of these who are currently dissatisfied and despite the size of their wallets are becoming part of the digital divide.
One niche that has always existed since the start of the internet, is geographically dispersed, extremely tech-savvy and would obviously benefit from a specialised service, is the hard-core online gaming community. Plusnet have designed a product just to serve this communities needs.
As at Mar 2007, OFCOM estimated that 32% of UK Broadband population participated in online gaming: with 12.4 residential broadband customers that is nearly 4m gaming homes in the UK. Obviously, not everyone plays games frequently enough to consider a specialised service, but PlusNet estimate their target market at 400k or 10% of the overall gamers.
If we consider this market size against the SME market which is the other preferred ISP target niche which OFCOM estimates has 600k subscribers, we can see that the size of the Gaming opportunity is significant.
Product Design
Obviously in online gaming, speed of response from the server to console/ PC is vital. Absolute speed is measured by latency and is transparent to gamers by just typing a simple command “ping games.server.name” from their PC. Therefore, no ISP can hide their performance from gaming customers.
The biggest issue for gamers is when ping times are not stable and vary wildly. Obviously if a game server or PC is heavily loaded and performing badly, ping times deteriorate and this is outside of the control of the ISP. But more often than not, ping spikes are the fault of the network and are caused by heavy network load.
The two obvious ways for a network to avoid these spikes are to either build huge capacity for everyone, including people who are possibly using applications where near real time responses are not vital – this is uneconomical. Or, prioritise the applications which require fast responses – this is the approach of PlusNet.
Packet Inspection
I very rarely read in general forum broadband users applauding ISPs for installing Packet Inspection Equipment on their networks, however this type of equipment does have an upside. Packet Inspection basically means that Internet Traffic is tagged and put in an ISP defined stream according to the application. In normal uncontested hours this is irrelevant apart from the couple of extra milliseconds that it takes for the packet inspection process and streaming to occur. However, when the network is congested the “important” streams are prioritised and the “less-important” streams are de-prioritised.
Personally for me, I expect my internet voice calls to work perfectly 24x7 even if it downgrades my browsing experience slightly and really I can’t be that bothered if my ftp download of a 10-meg file takes double the time. However, and this is a big, if congested hours run to most of the evening or my browsing experience takes forever or my ftp speed is really slow, I have a big problem. In other words for me, some traffic shaping at peak times is acceptable, blatant overloading of the network is not. Plusnet have a rolling 24-hour view of the application traffic on their network which highlights the peak hour loading issue perfectly.
Plusnet are very transparent about their traffic management policies and ascribe the highest priority to voice (voip) and gaming traffic. It is interesting that the VOIP services mentioned in the gaming release are the gamers favourites, Ventrilo and Teamspeak, and not the one’s which generate the most amount of publicity, eg Skype and GoogleTalk, even though these are prioritised as well.
In order to prioritise traffic, Plusnet must have a dedicated team continuously analysing application signatures and programming the deep packet inspection equipment - in the plusnet network the DPI kit is Ellacoya’s (pdf)
I would guess that most games publishers would be eager to help Plusnet, especially now they are part of BT, prioritise their traffic whilst others software vendors, especially in the P2P and Binary Newsgroup fields, are less helpful. It is a well-know fact that some vendors go about cloaking and encrypting their applications in order to avoid being managed by a ISP. The Ellacoya platform can currently identify some encrypted applications, but I guess we are in the middle of a long running cat and mouse game which will probably go on for many decades to come.
My own personal opinion is that based upon the economics of broadband some form of traffic shaping and prioritisation is inevitable on ALL networks - even all the unbundled networks especially as they start to become loaded and even one day fibre networks. I would rather signup to an ISP who are transparent in their policies, rather than charlatans who hide behind vague legalistic gobbledygook.
Interleaving
Interleaving is a common form of error correction used in computer science going back many years before broadband was even invented. Obviously, because it relies on analysing blocks of data rather than individual elements, it adds delay or latency or increases ping times in all uses. On the positive side, it reduces higher level stack errors and reduces the chance of a line dropping in an DSL broadband environment.
Interleaving, I am led to believe, adds on average 20 milliseconds of latency and therefore a lot of gamers want it turned off. Plusnet offer this option to the users – it is even self provisioned from the internet.
The key here is “self-provisioning” which makes it economical for the ISP to offer this service – no calls to the call centre, no signing onto Openreach systems – a simple API request generated by the customer. Most ISPs have not made this type of investment in their online support/ self-provisioning platforms and more especially automated the links to OpenReach on the backend. This is an ongoing investment as Openreach platforms and functionality change frequently. I suspect this is going to be a key ISP differentiator in the future.
Hosted Game Servers
Some Games allow ISPs to place Game Servers in the core of their network, thereby reducing the number of hops for Gamers and thereby improving performance. Although, Plusnet are not currently advertising these, I know for a fact they have some PC and PS3 gaming servers on beta.
Urban Myth #1: All Gamers are Bandwidth Hogs
One of the reasons I have heard from some ISPs why they don’t actively pursue gamers is that they consume above average amounts of bandwidth and therefore are not very profitable to serve comapred to your average homeowner browsing the web and periodically downloading some spam (sorry emails). This may well be true, but I have always believed the low bandwidth user will nearly always decide on price and therefore go with the mass market ISPs.
Plusnet kindly provided me with the following data:
“Approx 5,000 of our current customers did more than 100MB of gaming traffic last month and ~80% of these did less than 10GB of all traffic types. Also usage overnight is not counted, so patches etc can be downloaded overnight.”In other words the vast majority of current Plusnet gamers are not from the bandwidth hog species.
Of course, time is also on the Plusnet side with more and more people in the UK signing up for online game – the heavier early adopters will soon be outweighed by the lighter long tail.
Urban Myth #2: Gamers are Whingers who cost a fortune in Support.
This is a much harder myth to dispel, especially if the source is an ISP who offers p*ss-poor service. This type of ISP will generate support problems from across the base and not just from Gamers. The problem for these types of ISPs is that Gamers are harder to fob off with some non-answer.
Support is going to be a crucial battlefield going forward for the ISPs and I have never spoken to anyone who thinks they have gotten it right. To be fair to Plusnet with their online portal and transparency, they appear to me to try harder than the rest. I doubt many ISPs have online call queue and performance statistics.
Of course, this openness gives the press ammunition to have a field day when the fat-fingered monster of Plusnet strikes. Plusnet have had severe problems with email services in the past, but it would be churlish of me to joke about the sorry sagas here.
Urban Myth #3: Gamers do not Use Email.
I couldn't resist ;-)
Other Gaming ISPs
I’m sure there are a few out there on the net, the one that I keep hearing about is Jolt who seem to be well regarding the gaming community. I believe Jolt was formed as a spin-off from Nildram and still uses its network. Nildram was of course bought by Pipex who have just been purchased by Tiscali. Tiscali will need to keep its eyes on the ball if it is to see off the forthcoming threat from Plusnet.
Finally
I believe targeting niches is the way forward for smaller ipstream based ISPs – gaming is a perfect reasonable sized niche to build a differentiated service.
A lot of ISPs are trying to gain market share in the SME market which again offers the opportunity for differentiation and big value with products for home workers, VPN and hosting services. The business market has the double bonus of not only usually having a higher ARPU, but also a different time of day usage profile to the residential market.
One big niche for which I not yet seen a satisfactory solution is the richer rural home with long line lengths and therefore poor connection speeds. There must be plenty of these who are currently dissatisfied and despite the size of their wallets are becoming part of the digital divide.
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