Soumya Sen: Why dynamic data management matters
Tuesday, May 19, 2020
The world is in the midst of the fourth industrial revolution, according to the World Economic Forum. With technology—and what’s expected of it—changing rapidly, businesses are working to determine how best to use these tools going forward.
Carlson School Associate Professor Soumya Sen has studied many aspects of this topic, including important decisions businesses can make when it comes to managing data, both for their customers and themselves.
“With nearly everybody getting information and using their cellphones all the time, companies have to evaluate how they can do things differently,” Sen says.
Incentives offer a win-win
The explosive growth of multimedia data traffic, particularly from smartphones, caused Sen to look at new pricing structures that internet service providers (ISPs) could implement for data consumers. As of now, ISPs use penalties such as throttling, capping, and overage fees to manage network congestion.
As an alternative, Sen and his colleagues propose an incentive-based solution. Options include the use of time-dependent pricing, a dynamic structure that manages congestion by offering discounts to users for shifting some of their data use to off-peak hours. This can be particularly useful in alleviating network congestion when the demand for bandwidth suddenly exceeds the available resources due to more users coming online at the same time (such as during the 2019 Novel Coronavirus (COVID-19) pandemic).
This would help both customers and ISPs, says Sen. Customers benefit from lower fees while ISPs avoid any slowdowns on its network.
“A lot of people think that in this struggle of managing data, either ISPs win or consumers win,” Sen explains. “But, with time-dependent pricing, we’ve created a situation where everyone wins.”
Sen has received two U.S. patents, ensuring the pricing structures are implemented and work as designed for customers and ISPs.
The growth in cloud computing and 5G technologies create new opportunities for businesses to evaluate whether they should deploy those kinds of services on a dedicated or shared infrastructure. A shared public cloud—such as Amazon Web Services (AWS) or Azure—allows companies data to live alongside that of others on the same infrastructure. A dedicated, or private, the cloud gives businesses complete control of a slice of infrastructure on which they store their data.
Conventional wisdom says businesses should favor shared infrastructures because it saves costs.
“When you have shared infrastructure, there are quite a few benefits and we would expect a lot of businesses to choose that model,” he says. “But that is different from many of the observations we’re seeing in the industry.”
To study this, Sen and his team developed analytical models that demonstrate these decisions are much more complex than they seem. They found that while lower costs always favor a shared infrastructure, having flexibility is a major benefit to organizations that design their IT infrastructure.
One important factor is reprovisioning, or the ability to provide more capacity quickly with technologies such as virtualization.
“Depending on other cost factors, such as the gross profit margin and return on capacity investment, we see that dedicated infrastructures may sometimes be a better option,” according to Sen. “This is consistent with what we’re seeing [in the market]. This doesn’t mean it’s the only factor— security could be another reason—but the ambiguous role that reprovisioning ability can play in favoring one choice over the other is something we revealed through our analysis.”
Looking to the future
With the vast array of internet-connected devices and the need for companies to constantly evaluate usage, change in the field is always happening.
Sen’s research on data pricing for ISPs and infrastructure deployment could have a tremendous impact on how millions of people pay for and use their mobile data.
“The current measures used by the ISPs are harmful to the internet ecosystem,” Sen says. “If we are able to make this shift, we can change user behavior and enable better revenue management in multimedia-rich networks.”
This article appeared in the Spring 2020 Discovery magazine
In this issue of Discovery at Carlson, you’ll read about how emerging countries handle the demand for vaccines and why we make different decisions during a presidential election year to the long-lasting impact of a CEO’s cultural heritage and a study supporting quarterly earnings reports, among other topics.