HP brings cloud economics to networking with a pay-per-use model

You've heard of software as a service, infrastructure as a service and even security as a service. Now there is LAN as a service, a business model that lets you acquire a modern network infrastructure and pay only for the ports you use.

HP just announced the HP FlexNetwork Utility Advantage Program, a pay-per-use managed network offering that represents a completely new model for modernizing your network infrastructure. Analyst firms such as Gartner and Forrester say this type of pay-as-you-go business model for enterprise networking is the next evolutionary step toward the cloud.

Many enterprises are facing a network refresh in order to support modern business requirements. For example, it's hard to support virtual machine mobility, unified communications, extensive multimedia capabilities, and a growing array of mobile devices on a legacy network that was architected many years ago for client/server style computing.

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But buying new enterprise network gear is expensive. Many companies don't have the capital in their budgets or don't want to tie up their capital long-term to modernize their network. HP's new program makes it possible to get new network infrastructure and pay for it on a per-use basis from an operating budget rather than a capital budget. In essence, HP is applying cloud economics to on-premise networking.

Here's a high-level overview of how the HP FlexNetwork Utility Advantage Program works:

An enterprise starts by partnering with its preferred communications service provider (CSP) -- typically the company that provides telco and Internet service to the enterprise. The enterprise outlines its specific business computing requirements and number of users, and the CSP determines the optimal network configuration based on HP Networking solutions. The CSP develops a proposal and a service level agreement for the network infrastructure.

Once the enterprise accepts the proposal, the CSP deploys and provisions the network, migrating existing applications and users to the new configuration. The equipment is installed on the customer's premises but -- here's the kicker -- the enterprise doesn't buy the equipment. Instead, HP retains ownership and assigns "per port" licenses to the CSP, which in turn assigns them to the enterprise customer. The CSP only activates the ports the customer needs. As business requirements change, the customer can dynamically provision ports, paying only for what it uses. The CSP provides remote management of the network using HP's FlexManagement software, further reducing the enterprise's need for on-site support.

Each network is built to the specifications provided by each customer, utilizing hardware and software from the HP FlexNetwork Architecture. The configurations use advanced innovations for wired and wireless LAN infrastructure to ensure a flexible networking foundation for years to come. This includes HP's recently announced commercial OpenFlow software, a key technology in software-defined networks.

In addition to getting an advanced network that can support modern business applications, the enterprise eliminates the sizeable expense of new LAN equipment as well as the increasing costs of network management and support. This better aligns the cost of the network to the needs of the business. Interestingly, these are similar to the reasons companies are now choosing software as a service instead of licensing and installing their own software.

It is also similar to SaaS in that an enterprise's network can be refreshed or renewed with new equipment or capabilities every so often.

This new LAN-as-a-service model provides enterprises with several key benefits. First, the customer gets a secure network at a predictable monthly cost. Second, the solution is flexible, allowing the organization to scale the network up or down as business needs evolve. And third, the network uses the latest technology and is ready to support the latest generation of applications.

Just as SaaS computing has grown tremendously in the past few years, pay-per-use networks are expected to be the next big thing.

Linda Musthaler is a principal analyst with Essential Solutions Corporation. You can write to her at LMusthaler@essential-iws.com.

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About Essential Solutions Corp:

Essential Solutions researches the practical value of information technology, and how it can make individual workers and entire organizations more productive. Essential Solutions offers consulting services to computer industry and corporate clients to help define and fulfill the potential of IT.

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