Hi Nick,
Thanks for your constructive feedback.
First, I would like to note that the BCG matrix can be used
for a lot of things - including external M&A analysis as
you mentioned - but originally it was created as a tool to
analyze product portfolios strategically... internally.
😊
Whether an organization is "for profit"
or "non-profit" is a nuance. The revenue, expenses, and
capital budgeting processes for both types are the same. Where
they differ is what to do with the excess.. or do they? For
profits tend to plow excess into new projects/investments and
return excess to their owners (= dividend) only if they are
unable to find projects with better return. Non-profits behave
rather similarly; some have returned excess (after all
expenses and investments) to its membership - not owners, mind
- in the past in the form of reduced annual fees.....
I imagine most people are fine with
whatever RIPE NCC thinks it needs and wants to spend their
revenue on. After all, it is to the benefit of the community
and internet. This is because the numbers individually are so
small, and I believe most members are not even aware of the
members-discuss list or read the annual budget PDFs, etc. etc.
This of course is fine; everyone is entitled to their opinion
and choice.
Still, when the CFO equivalent for an
organization comes asking for alternatives on how to raise
prices to meet projected future budget from its customers
(membership) I think it is super useful to look critically at
what that organization spends its revenue on. I mean, the RIPE
NCC budget has mostly grown year over year and so have pretty
much all its departments. The revenue streams have been all
but assured in the past years due to growth in networking.
But are all these new (or old) functions
necessary? My view is that they are not which is why I am
posting here. As such one should take a critical look at what
the organization does, what its original remit was and whether
there are things that might not be quite inside of that scope.
The organization itself thinks it is entitled to increase its
charges because they do not want to reduce anything they
already do.
Kaj
-----Original Message-----
From: Nick Hilliard <nick@netability.ie>
Sent: Thursday, March 9, 2023 13:44
To: Kaj Niemi <kajtzu@basen.net>
Cc: members-discuss@ripe.net
Subject: Re: [members-discuss] [ncc-announce] [GM]
Consultation on RIPE NCC Charging Scheme 2024
Kaj Niemi wrote on 08/03/2023 17:27:
> If we use the BCG matrix to analyze
RIPE NCC briefly, it is certainly
> in the lower left quadrant of the
four-cell matrix - a cash cow.
Kaj,
it's probably useful to keep this style
of analysis in the rear view
mirror, but the BCG growth matrix is a
somewhat un-nuanced mechanism
relevant to investment opportunity
assessment rather than revenue
modelling of not-for-profit
organisations.
Inevitably, revenue remodelling
exercises will create questions about
what the organisation actually does.
Zooming out on this, the RIPE NCC
operates on a mandate to carry out the
operational requirements of the
RIPE Community. This includes registry
functions, but the RIR function
is only part of that mandate.
Personally, I'd take the view that these
two discussions need to be
decoupled: the RIPE NCC activity plan is
one policy decision, and the
nuances of funding this activity plan is
a slightly different one. If
the two decisions are tied together, we
end up with too many moving
parts, i.e. instability. I don't believe
that this would be in anyone's
interests.
The discussion at hand is whether the
organisation should revert its
costing model from everyone-pays-equally
to
larger-resource-holders-pay-more. We've
had this discussion before, in
2012, where a Task Force was asked to
examine the NCC funding model.
They designed 3 potential schemes and
the RIPE NCC membership voted
197:109 to adopt a common fee for all
LIRs. The question we have now is
whether to continue with this model, or
to revert to the older model.
I.e. this is not a new debate, nor is it
of earth shattering importance.
What's important is that the RIPE NCC
has financial stability.
In terms of the cost increases proposed
for larger LIRs, the reality of
ipv4 address assignment is that at €50 /
address, a RIR cost increase of
€1800 -> €8000 is negligible. I
don't think it's likely they'll start
asking serious existential questions
about the RIPE NCC on the basis of
a couple of €K.
Nick