ENTERPRISE CONNECTIVITY SERVICE: A Strategic Proposition

Connectivity services look at services from an enterprise point of view and

incorporate all kinds of services-voice, data, video, and Internet under one

basket. With convergence and shift from TDM to IP, the concept of single network

providing all services is gaining ground and so the concept of connectivity

services is catching up.

Earlier, service providers used to offer services as per the license

agreements, e.g., basic service providers used to offer basic telephony and ISDN

services whereas NLD operators used to offer leased line services. But large

operators now opt for all types of licenses (basic, cellular, ILD, DLD, ISP,

international connectivity services like ATM, frame relay, IP-VPN, and MPLS-based

IP-VPN). Initially, all the operators were busy with infrastructure deployment

but with majority of the deployments complete in large cities, the concept of

integrated service became the order of the day.

With integrated service provider like BSNL, Bharti, Tata, and Reliance coming

into the picture, service providers are offering the complete bouquet of

services for enterprises. This is beneficial for both service providers as well

enterprise users. Today, service providers even operate a separate customer-care

help lines for corporate customers of connectivity services.

Connectivity services not only look at providing communications services but

also includes: design, integration, security, and network management-all as a

complete package. Even if connectivity services are provided by integrated

service providers, all the services apart from communications services can be

taken care of by integrators such as CMC, Datacraft, IBM, HCL Info, HCL Comnet,

HP, Network Solutions, and Wipro. So, in some cases, the integrators might

compete with and in some cases they may even collaborate with the telecom

service providers. So, the integrators in some cases manage on behalf of the

telcos and in some cases they manage the telcos-when they are the system

integrators for the corporations. Here, integrators have had an advantage over

telcos as they understand SLAs better.

Service providers have restructured their organization structure as they feel

that it is better to go with complete solution rather then focusing on

individual services marketed by different individuals within the same

organization. All the integrated service provider provide all kinds of services

be it wireless or wireline, TDM or IP, and voice or data. E.g. Tata Indicom

Enterprise Business Unit (TIEBU) is the enterprise division of Tata Teleservices

and provides services from Tata Teleservices, VSNL, and others. Reliance

Infocomm also has an enterprise division and so does Bharti's enterprise

division called Airtel Enterprise Services. Even, the incumbent operator is not

planning to be left behind and has formed an enterprise division.

Presently, incumbent operators-BSNL and MTNL-have a large market share

and all private operators are targeting the creamy customers of incumbent

operators. The coming of private operators has increased the quality of service

from BSNL and MTNL and the incumbents have become more responsive. In terms of

reach, private operators still have a long way to go in comparison to the

incumbent operators.

Problems and Solutions

- Shift from vendor to partner: Enterprises are

increasingly looking at service providers as partners, so there is lot of

expectation from them. They are not only expected to provide solutions but are

also expected to help the enterprises in growing their business, just like a

business partner would. However, business partners need to share a lot of

information and collaborate with each other.

Corporates require seamless broadband connectivity for voice, data, and video applications

Presently, enterprise users have some clues on what the

service providers' growth plans are, but there needs to be greater

collaboration. Service providers should share their future roadmap so that

enterprise users can plan ahead.

- Connectivity services as business proposition:

Presently,

connectivity services are looked at as a business proposition and not merely as

telecom pieces. Today, corporates look at many macro- and micro-level issues

before they finalize vendors. Nowadays, decisions relating to connectivity

services no longer involve only the CIO, the top management is also involved in

these decisions. With more people getting involved, sales/negotiating cycle has

become longer. However, one advantage of this is that, there is a lot of clarity

at the initial stage, and this helps in better adherence of SLAs. Also, with the

increase in deal sizes as well as sales cycles the corporates have become very

choosy about their 'partners' as they want to opt for one who can deliver as

per their requirement and not what the partners are carrying in their kitty.

Corporate users now look at lot of things like fault

management, business-continuity management, service-level management, and

lifecycle management before finalizing their service providers.

- Local loop, a big obstacle: The major

challenge for corporates is not in the backbone infrastructure but in the last

mile. With corporates reaching out to smaller cities, the problem becomes more

acute. Corporates are forced to opt only for those cities where the telecom

infrastructure is okay. And they are not able to go where there may be a real

need or opportunities, except for acceptable telecom access. In majority of the

small cities, there is no choice but to opt for BSNL's infrastructure, which

has improved over the years.

For local loop, integrators and international connectivity

service providers are investing a lot on ensuring that customer service

deliverables are achieved by building know-how on how to maintain high uptimes

and by following a mix-n-match approach.

- From competition to cooperation:

With

technologies, applications, and geographies increasing for enterprise users, the

complexity of the network is also increasing and so there is need for partners,

system integrators, and managed service providers who can work along with

service providers to see that all the functions run smoothly. So, the service

provider have to pick up the contract, outsource bits and pieces, and see how

efficiently it can be managed in terms of time and cost.

Changing Work Preferences Bandwidth needs of enterprises are growing very fast and are expected to grow at the rate of 50 percent or more every year with increased number of applications coming into the picture. With users wanting to use their network anytime, anyplace, anywhere their demands have shifted from narrowband to broadband connectivity, to increase the productivity of the employees. With mobile deployment catching up, lots of mobile applications are also making inroads as they provide higher levels of automation. Applications like sales force automation, and others will come into play but service providers are still tackling with security-related issues.

The real skill of service providers lays in the partners that

they possess and how they can join hands, understand each other, and work with

unified strength to provide error-free solutions to corporates. Service

providers should also focus on educating corporate customers on a regular basis

on the new technology options in the market.

- Wireless, still a long way: Presently,

wireless is used more in the local loop where speeds are reasonable but they are

still problematic for MAN/WAN applications. In the big cities, frequency issues

are still there though these issues get eliminated in rural areas. Better

wireless technologies like WiMax are being tested but there are still

outstanding issues, e.g., cost and benefits ratio of wireless is not appealing

to a large range of customers.

- SLA: 5 times 9 needed: The SLA (service level

agreement) commitments are critical for any business. With competition becoming

aggressive, enterprise users are asking for high uptime and presently majority

of large companies are asking for 99.999 percent uptime. So, enterprise users

are looking for service providers who can provide SLAs with network uptime of

99.999 percent and also provide redundancies. Enterprises are also looking at

service providers for network and bandwidth optimization.

Communications infrastructure in India is unreliable

therefore enterprise users opt for three levels of redundancies to ensure that

their links remain on. This increases network complexity as well as cost for the

enterprise users. If service providers can improve on this front, it can reduce

costs as well as increase efficiency for enterprises.

- Proper mix in account management:

Account

management teams should have relationship managers acting as an interface

between the enterprise and the service provider's sales and marketing team.

Relationship manager also helps in educating the enterprise users about the

various services available. The account management team should also have domain

experts and integrators so that it can offer a complete package to enterprise

users depending upon their particular requirements. This also helps in keeping

the costs low and leveraging on existing infrastructure. The team should also

have technology people as it will give the team a 360-degree view.

- Business intelligence not reporting:

While

large corporates in financial sectors are deploying their own NOC for

confidentiality reasons, majority of companies use network integrators'

network management facilities. Network complexity has led to service providers

doing most of the work for enterprises. Today the corporates are more interested

in monitoring their networks and ensuring that the SLAs are adhered to. The

reporting cycles have shifted from monthly to weekly to daily and now to online.

Enterprises are looking at network management facilities that can: offer all the

requisite tools so that optimization can happen at all levels and that can

manage facilities remotely. Using network performance management tools and

reports, enterprise users are also interested in knowing what kind of

applications are creating problems, where the bandwidth is being choked, where

is there a need for additional bandwidth.

- Shift from TDM To IP: Enterprise users are

opting for IP-based technologies as they provide flexibility as well as

increased reliability. In majority of the cases it also leads to lower total

cost of ownership (TCO). So, the move is towards IP-EPABX, IP-VPN, and MPLS

based IP-VPN, IP-SAN, and VoIP solutions. On the IP front, enterprises have

moved from the pilot stage and are now looking more on the deployment aspect.

But the real challenge is how to maintain the legacy

applications or services and also migrate to new technologies, both at the same

time.

- Prime concern: security: Security is the

agenda number one for enterprise users. And with increased focus on IP and

wireless, corporates are more concern about it as they are more open in nature.

With increased reliance on network and increasing number of applications,

security is vital for enterprise. Security has to be implemented at different

levels to make the environment secure.

MPLS Allows Service Providers to Deliver IP-VPN Services to Business Customers Source: Cisco Systems

Some service providers are implementing security operating

centers (SOC) which will be connected to the network operating center. This will

help in remote security management of the network and providing security and

management at the same time.

- Building trust: Service providers should

build trust through transparency by providing the right information at the right

time to corporates. Service providers have to invest in tools so that

information can be provided in a proactive manner. During the finalization of

deals, prices for different services should be unbundled so that corporates can

negotiate a better deal.

Corporates are not interested in better packages, they want

to opt for better financial packages.

Technology Trends



- MPLS based IP-VPN service: Multi-Protocol Label Switching (MPLS)

was developed as a packet-based technology and is rapidly becoming the key for

use in core networks, including converged data and voice networks. MPLS does not

replace IP routing, but works alongside existing and future routing technologies

to provide high-speed data forwarding between label-switched routers (LSRs)

together with reservation of bandwidth for traffic flows with differing quality

of service (QoS) requirements. MPLS uses a technique known as label switching to

forward data through the network.

IT managers in all verticals irrespective of size are facing

challenge of supporting an increasingly complex enterprise network with

increased requirement of voice, data and video applications and the challenge is

how to integrate them. The IP-based VPN has emerged as a viable solution for

meeting these challenges. To deliver IP VPN services profitably, many service

providers in India are enhancing their core networks by deploying Multiprotocol

Label Switching (MPLS) technology. MPLS blends the intelligence of routing with

the performance of switching, enabling service providers to extend the

capabilities of IP to large-scale VPN implementations.

MPLS based IP-VPN provide lot of benefits to service

providers as well as enterprise users. These are: improved customer retention

and increased profitability by offering cost-effective and flexible VPN services

based on IP and MPLS; entry point for selling managed IP services in addition to

access; ability to customize VPN services for corporate customers, improved

profitability through reduced costs for VPN service provisioning and network

operation; flexibility to change the internal network architecture quickly for

efficient use of resources; and support for network scalability to deliver

customer-specific, on-demand services.

The IP-VPN service is ideal for enterprises (large,

mid-sized, and small) as they have strong requirements for IP-VPN design,

including domestic and international connectivity, strong security, and

integration with existing legacy network. The service provider must be able to

quickly add new sites, providing strong security and service quality backed up

by SLAs.

MPLS blends the intelligence of routing with the performance

of switching, providing significant benefits to networks with a native IP

architecture as well as those with IP, ATM, or a mixture of other Layer 2

technologies. MPLS technology is critical for creating scalable VPNs and

delivering end-to-end quality of service (QoS). It enables service providers to

make efficient use of existing networks to meet future growth and support rapid

fault correction of link and node failures. The inherent MPLS traffic

engineering and fast reroute capabilities can significantly improve network

service quality by providing the ability to maximize network bandwidth and

reroute traffic rapidly in failure conditions within the core network.

MPLS technology helps to deliver highly scalable and

differentiated IP services end to end with simpler configuration, management,

and provisioning.

IP-VPN



It is the hottest WAN technology today. IP-VPN is 'an emulation of a

private wide-area network (WAN) using IP facilities, including the public

Internet or private IP backbone'. From this definition, it follows that an IP-VPN

could either be CPE-based or network-based. A VPN can be built on any of the

layer-2 technologies, including frame relay (FR); however, that would just be a

VPN rather than an IP-based VPN. The primary advantages offered by IP-VPN are

based on two parameters-first, IP-VPN is a connectionless service in contrast

to the layer-2 ATM and frame relay services, and second, IP-VPN is a ubiquitous

(any-to-any) service in contrast to the point-to-point inherent feature of an

ATM/FR service.

IP-VPN services are recognized as the next evolutionary step

for corporates that are currently using the more expensive FR or ATM-VPN

services, private line services, or the public Internet for their connectivity

needs. Also IP-VPNs are expected to increasingly replace CPE-based VPNs as these

services offer more security than the Internet, cost-effective any-to-any

connectivity, and the capability to carry multiple types of traffic for

customers who want an integrated network solution. According to a recently

released report by In-Stat/MDR on IP-VPNs, a major driver for uptake of IP-VPN

services was found to be the increasing momentum towards convergence of voice,

data, and video traffic on a network-based IP-VPN service. IP-VPN also has the

ability to offer more innovative offerings such as SSL remote access, Wi-Fi

hotspot VPN access, and multicasting over VPN services. Event though such

services are not available in India as of now, most services providers are

expected to offer them soon.