RIPE NCC Expenditure Planning 1995
- Date: Tue, 27 Jun 1995 13:25:50 +0200
Dear contributors,
pelase find below the report on "RIPE NCC Expenditure Planning 1995".
It proposes amendments to the RIPE NCC expenditure budget for 1995.
TERENA agrees to these ammendments and has authorised the NCC to
start implementing them, assuming the Contributors Committee agrees
at least to the increase in staff resources and the additional
expenditure for new local IRs.
A PostScript version follows the ASCII.
If you have any comments or questions, please do not hesitate to contact me.
Regards
Daniel Karrenberg
RIPE NCC Manager
RIPE NCC Expenditure Planning 1995
June 1995
____________________________________________________
RIPE NCC Expenditure Planning 1995
Daniel Karrenberg
RIPE NCC
Scope
This memorandum proposes amendments to the RIPE NCC
expenditure budget for 1995. The companion document
"RIPE NCC Revenue in 1995" provides information
about the revenue situation.
Workload
The growth rate of the European Internet seems to be
increasing. This can be seen in a number of key
figures like the RIPE DNS hostcount:
1.4e+06++---------------------------------------------------+
| |
1.3e+06++ A |
| * |
1.2e+06++ * |
| * |
1.1e+06++ * |
| * |
1e+06++ *A |
| ** |
900000++ ** |
| *A |
| *** |
800000++ *A* |
| ** |
700000++ ** |
| *A |
600000++ *** |
| *A* |
500000++ *** |
| ***A* |
400000++----A**---+-----+-----+-----+-----+-----+-----+----+
Q2/93 Q3/93 Q4/93 Q1/94 Q2/94 Q3/94 Q4/94 Q1/95
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The current workload of the RIPE NCC is also greater
than expected as the number of local registries
grows somewhat faster than predicted:
+---------------------------------------------------+
| |
180++ A |
| * |
| * |
160++ * |
| * |
| * |
140++ *A |
| *** |
| *A* |
120++ *** |
| *A* |
| ** |
| ** |
100++ *A |
| *** |
| *A* |
80++ *** |
| *A* |
| *** |
60++----A*----+-----+-----+-----+-----+-----+-----+----+
Q2/93 Q3/93 Q4/93 Q1/94 Q2/94 Q3/94 Q4/94 Q1/95
Normally the sharp increase caused by the data point
for Q1/95, would not be cause for revised projec-
tions by itself. However the currently available
data indicate that the growth rate has persistently
increased and other indicators such as the hostcount
mentioned above follow the same trend.
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Indicators for NCC workload such as the number of
incoming e-mail messages and faxes to the registry
functions of the NCC look quite similar too:
3500++---------------------------------------------------+
| |
| A |
3000++ * |
| ** |
| * |
2500++ * |
| *A |
| *** |
2000++ *A* |
| *** |
| *A* |
1500++ *** |
| *A* |
| ** |
1000++ ** |
| ***A |
| *A** |
500++ *** |
| A* |
| |
0++----+-----+-----+-----+-----+-----+-----+-----+----+
Q2/93 Q3/93 Q4/93 Q1/94 Q2/94 Q3/94 Q4/94 Q1/95
Due to the sound funding model, the growth in reg-
istries also leads to a growth in available finan-
cial resources; see the accompanying revenue report
for details.
However, the NCC has just barely passed the staffing
level that was necessary already in 1994 and is
still lagging behind this development in staff
resources.
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Proposed 1995 Budget Amendments
To cope with the increased workload and the neces-
sity to put resources onto support for new reg-
istries we propose to amend the 1995 expenditure as
follows:
+--------------------+----------------------------------------+
| Budget by Cost | 1995 1995 delta |
| | budgeted % revised % |
+--------------------+----------------------------------------+
| | |
| Personnel | 296 73 347 66 51 |
| Office Running | 53 13 66 12 13 |
|Contracted Services | 0 0 40 8 40 |
| Travel | 35 9 35 7 0 |
| Computing | 23 6 41 8 18 |
| | |
+--------------------+----------------------------------------+
| TOTAL (kECU) | 407 100 529 100 122 |
+--------------------+----------------------------------------+
These figures are presented in terms of the budget
lines traditionally used in NCC budgeting. These
lines represent cost classes and do not show the
relation of the expenditure to activities. The
original lines "Rent&Office", "TERENA Services" and
"Recruitment" have been combined into "Office Run-
ning". The line "Unforeseen" has been absorbed into
the other lines.
The new line "Contracted Services" represents NCC
activities and services which are not performed by
NCC staff but contracted out. This concerns support
for new registries in the form of tutorials and
other documentation. Besides this the budget
increase represents three additional staff for the
second part of 1995: two junior hostmasters and a
deputy manager. This will bring the total number of
junior hostmasters joining the team this summer to
three which will provide a serious relief from the
current overload situation in registration services.
The deputy manager is needed in order to provide
room for proactive thinking in management and to re-
start the regular reporting which has been suffering
severely from the overload.
The absolute increase in 1995 of the "Personnel"
budget line is rather modest as it is based on the
junior people working for 6 months and the deputy
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manager for 3 months of the year. Assuming one year
contracts for all new staff this brings the total
staff commitment for 1996 to 380kECU. To employ
this staff for the whole of 1996 will cost slightly
more than 500kECU.
In view of the urgency of this relief we are already
in the process of recruiting and hiring the junior
hostmasters. It is expected that the additional
staff can be hired quickly and the contract work for
the support of new registries can also start reason-
ably quickly. The NCC will be able to cope with the
increased load and slowly start proactive activities
again before the end of 1995.
1995 Budget by Activities
In order to offer a clearer view on relationship
between expenditure and activities we also present a
different way of budgeting. There are four main
budget lines closely related to the Activity Plan:
"Administration & Reporting", "Registration Ser-
vices", "New Activities" and "Other Activities".
+----------------------+--------------------------------------+
| Budget by Activity | 1995 1995 delta |
| | actual % revised % |
+----------------------+--------------------------------------+
| | |
| Admin & Reporting | 62 15 78 15 16 |
|Registration Services | 303 74 358 68 55 |
| New Activities | 9 2 22 4 13 |
| Other Activities | 33 8 71 13 38 |
| | |
+----------------------+--------------------------------------+
| TOTAL (kECU) | 407 100 529 100 122 |
+----------------------+--------------------------------------+
The "Administration & Reporting" budget line repre-
sents activities 6.1-6.4 of the activity plan, the
formal procedures concerned with billing and the
administration of the NCC computing systems. This
currently represents 15% of the global costs and
shall be proportionally kept at 15%.
The "Registration Services" budget line represents
the basic NCC activities related to the NCC being a
Regional Internet Registry, such as handling of
incoming requests, assignment and allocation of net-
work numbers and the coordination with other
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organisations. In addition are included in this
chapter the activities related to the support and
the training required to secure a proper start out
of new registries, which will eventually lead to a
reduction of the load on the RIPE-NCC. In relation
to the Activity Plan these are 3.1, 3.2(66%), 3.4,
3.8, and 4.1(50%). Although in absolute value the
main change proposed is within this chapter, the
total fraction will reduce from 76% to 68%, thus
confirming a better and more balanced distribution
of activities.
The "New Activities" line represents the participa-
tion in special projects approved by the RIPE commu-
nity, as defined in the RIPE-NCC activity plan
(4.4). Almost non existent today, shall represent 4%
of our activities in the future. The planned activ-
ities in 1995 are exclusively related to IPv6 track-
ing and testing.
The "Other Activities" line encompasses all the
remaining activities In particular the maintenance
of the Routing Registry as well as other tools
developed at the RIPE-NCC, such as PRIDE, the update
of the Database management tools, and the mainte-
nance of RIPE related documents and meetings organi-
sation. This activities represent about 8% of the
total and shall be proportionally increased to 13%.
It is important to note that the "1995 Actual" col-
umn represents roughly how resources are being used
currently out of necessity, not how they should be
used according to the Activity Plan. The lack of
personnel has forced us to concentrate resources on
the Registration Services, thus neglecting the other
activities defined in the Activity Plan. This has
serious effects on both the progress of those activ-
ities and staff morale. The current staff were not
hired and are ill suited to spend the majority of
their time doing registration services. The new
junior staff will explicitly be hired and suited to
spend the majority of their time doing registration
services, freeing some time of the current staff for
the remaining activities.
As this budgeting model clearly shows where
resources are going w.r.t. the activities, we pro-
pose to adopt it as the main tool for NCC budgeting
in the future.
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Support for New Registries
The total expenditure on activities for new reg-
istries in the revised budget is ECU 117k. This
represents approximately two thirds of the funds
that are earmarked for these activities. It is not
possible to use more resources in a useful way this
year.
Building Reserves
Reserves accumulated so far (ECU 51k) will probably
have to be used to cover for the 1994 revenue prob-
lems, which shall leave us almost with no reserves
at all.
It is therefore necessary to build prudent reserves,
equal to at least half the yearly operating cost of
the NCC, as TERENA members require that no costs
associated with an unexpected discontinuation of the
NCC be borne by TERENA.
Thanks to a growth, even faster than expected, of
the NCC customers there was a healthy surplus
expected in 1995, which amounts to 344Kecu. It is
proposed that this amount be transferred to
reserves, which will provide about half of what is
deemed necessary.
Conclusions
The European Internet is growing faster than
expected.
The 1995 expenditure needs to be increased by
112kECU in order to catch up to present needs and to
cope with the increasing growth rate of the work-
load.
We cannot spend all the unexpected signup fee rev-
enue of ECU 174k on new registry support effec-
tively, but max. 66% of that amount.
A substantial part of 1995 revenue should be used to
build reserves.
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