Optimal design of service overlay networks

Service Overlay Networks (SONs) are currently one of the most promising architectures envisioned to provide end-to- end Quality of Service guarantees in the Internet, without requiring significant changes to the underlying network infrastructure. A SON is an application-layer network operated by a third- party Internet Service Provider (ISP) that owns a set of overlay nodes, residing in the underlying ISP domains, interconnected by overlay links. The deployment of a SON can be a capital-intensive investment, and hence its planning requires careful decisions, including the overlay nodes´ placement, the capacity provisioning of overlay links as well as of access links that connect the end-users to the SON infrastructure. In this paper we propose two novel optimization models for the planning of Service Overlay Networks which aim to select the number and positions of overlay nodes, as well as the capacity reserved for each overlay link, while taking into account in an accurate way traffic routing. The first model minimizes the SON installation cost while providing full coverage to all network´s users. The second model maximizes the SON revenue by further choosing which users to serve, based on the expected gain, and taking into consideration budget constraints that the SON operator could specify. We provide the optimal solutions of the proposed problem formulations on a set of realistic-size instances and discuss the effect of different parameters on the characteristics of the planned networks.