OSI is a theoretical model, so why are its concepts used to describe real-world networks?


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Because the concepts defined by OSI model are useful for understanding real-world networks.

OSI defines 7 layers, these layers (especially layer 5/Session and 6/Presentation) don't match well with the now dominant well-known telecom protocols (above and around IP) - the model should not be blamed for this. After all we can't say that the IP protocol stack is particularly well designed.

The model defines a lot of very useful concepts, and distinctions to be made, in the analysis/understanding/design of any complex telecom system.
For example: the notions of service and protocol; the notion of primitive (request, confirm, indication, response, signal); the notion of protocol entity and Service Access Point; the notion of connection vs. association; the notions of SDU (Service Data Unit), PDU (Protocol Data Unit), IDU (Interface Data Unit); etc. These concepts are extremely useful.

Also, OSI model is still used heavily to define current protocols.
For example ISO 11073-20601 and friends (Point-of-care medical device communication), used in medical devices (typically over Bluetooth) heavily use OSI modelling of Application Layer. Or the IEEE 802.xxx lower layer protocols (e.g. 802.15.4, radio protocol) - these use the ISO modelling of the lower layers. These protocols are recently designed and in use today.

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