Competition analysis in data center interconnection networks using the Lotka-Volterra model

Abstract

This paper proposes that horizontal competition exists between telecommunications carriers and data center interconnection (DCI) operators in DC-DC interconnections, and vertical competition exists between telecommunications carriers and DCI operators in end-user-DC interconnections. We build a new hybrid model using the Lotka-Volterra model and discuss the conditions to establish long-term equilibrium relationships.

We find that in equilibrium, multiple patterns, such as that either telecommunications carriers or DCI operators disappear and that telecommunications carriers and DCI operators coexist, exist in DC-DC interconnections as well as in end-user-DC interconnections. We also discuss the relationships between parameters for telecommunication carriers to maintain their share in DCI networks and policy proposals to realize these relationships. Two cases are observed: 1) DCI operators disappear in DC-DC interconnections. To realize this, regulations promoting the growth of telecommunication carriers’ data traffic while suppressing that of DCI operators’ data traffic are effective. 2) Telecommunication carriers and DCI operators coexist in DC-DC interconnections. To realize this, regulations promoting the saturation of both telecommunications carriers’ and DCI operators’ data traffic and differentiation that prevents from preying on each other's data traffic are effective.