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Internet2 Financial Outlook – Member Dues & Abilene Fees for 2006 and 2007
Internet2 Financial Outlook – Member Dues & Abilene Fees for 2006 and 2007
Internet2 Business MeetingSpring 2005 Internet2 Member Meeting
May 3, 2005
Laurie Burns, Member & Partner Relations Internet2
2
Priority discussionsPriority discussions
• Discussions held with Councils during first quarter of 2005, most extensively with NPPAC
• Priority rankings different, points to diversity of interests in community and importance of balancing what is paid for by member dues and what from other sources
3
Financial outlookFinancial outlook
• Reserves have been managed to provide short-term bridging and to minimize impact of new resource needs on members
• Reserves are maintained to allow investments in the future, but can't absorb ongoing operational deficits such as projection for ’05 and beyond
• Facing a period of increased spending:• Next generation of Abilene• Related technology development (e.g., HOPI)• Ramped up work in security
4
Closing the gapClosing the gap
Magnitude of resource needs requires:• Exploration of other sources of revenue• Continued and heightened control of costs,
including reducing activities in some areas• Examination of sustainable sources of
funding
5
Closing the gapClosing the gap
Exploration of other sources of revenue• Grant and donations extremely important,
but can be one-time or otherwise limited• Potential competition with members may
mean Internet2 should not pursue certain grant opportunities
Cost control critical and will continue• Internet2 is reallocating $500,000 in 2005 to
absorb current year’s work in security without increasing deficit
6
Sustainable sources of fundingSustainable sources of funding
• General Principles• Sustained sources of funding are crucial to
Internet2's financial health • Sustained sources of funding allow
Internet2 to remain independent• Small additional investments by each
member adds up to significant funding for priority efforts, allows forward progress that benefits whole community
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• Dues were not changed for first six years of Internet2’s existence
• Dues have remained flat for last two years, at $27,000, $10,800, and $2,500
• During the past two years, Internet2 has:• Reduced expenditures and controlled headcount growth• Shifted resources to take on new work• Found grant support for work deemed important to the
community• Maintained its reserves
Member dues
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• Reduced expenditures • Health care costs, conference calling, cell phones,
legal support specialization, outsourced travel• Headcount relatively flat, maintained flexibility in
staff force, voluntary and involuntary attrition
• Shifted resources• Absorbed earlier phase of security work and ramp-
up of InCommon work with existing staff and resources
• Reduced staffing for the Commons, digital video work, and end-to-end performance
Member dues
9
Member duesMember dues
• Found grant support • Number of funded grants grew from 4 to 10 in past
two years• 10 of 19 (53%) of submissions were funded,
involving 40 member institutions• 5 of 10 are sub-awards with a member lead• Of remaining 5, over 70% of funds were
distributed to member institutions
10
Member duesMember dues
• Maintained reserves• Financial model has been to build reserves to
support investments in important projects• 2002/2003 Abilene upgrade and investment in
NLR are recent examples
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Abilene primary participation feesAbilene primary participation fees
• Primary Participation fee of $20,000 has remained constant since launch
• During this time, Abilene has:• Been through a major upgrade• Seen major increases in utilization• Seen major decrease in revenue per
gigabit• Continued to decrease connection fees
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Abilene revenue 2000-2004Abilene revenue 2000-2004
Revenue per Gigabit of Abilene Traffic
$2.08
$1.17
$0.70 $0.62
$0.27$-
$0.50
$1.00
$1.50
$2.00
$2.50
2000 2001 2002 2003 2004
Year
Dollars per Gigabit
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Abilene primary participation feesAbilene primary participation fees
• Abilene’s costs aren’t dropping as fast as revenues per megabit
• Abilene continues to out-perform other point-to-point lit services
• New work in security and HOPI are directly relevant to next generation of Abilene
14
New fees and dues New fees and dues
• Approved by Board of Trustees on April 17
• 2006: • Dues to $28,500/$11,500/$2,600• Participation fees to $21,000
• 2007:• Dues to $30,000/$12,000/$2,700• Participation fees to $22,000
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