It seems like we can buy almost anything as a service today. Servers, storage, applications and collaboration can all be purchased using an “as a service” model. Recently Sprint introduced both Workplace and Mobility as a service to add to the growing portfolio of consumption-based products. In our consumer lives the Amazon button turns consumer goods into a service. The one piece of technology that’s still difficult to buy as a service is the network.
Earlier this month, I authored this post discussing how the network needs to evolve into this kind of model.
Today, Alcatel-Lucent Enterprise (ALE) announced at the CeBIT event in Germany that it was introducing its “Network On Demand” (NoD) service enabling businesses to consume the latest networking technology on a pay-per-use basis. The new consumption model gives customers an alternative approach to the traditional capital expenditure model. This can be particularly useful for organizations with older infrastructure but can’t afford to upgrade or where the network has spikes of utilization.
NoD covers the spectrum of ALE products and includes the Intelligent Fabric (data center), Unified Access (wired and wireless campus) and Network analytics. These areas address all major network transitions including software defined networking, mobility, cloud computing and Internet of things. The Smart Analytics collects and analyzes network infrastructure data to provide business insights to improve the quality of experience. Businesses that want to take advantage of these network transitions can now do so without worrying about a hefty up front investment. Customers will pay for the infrastructure on a per connection, per day pricing model. This means businesses can scale up and down on a daily basis if they need to and only pay for what they use.
In addition to cost conscious companies or ones that are trying to shift to more of an OpEx model, NoD is ideally suited for businesses that have a high number of transient users that create variability in the number of connections on a day-to-day basis. Businesses are charged only for the daily use of networked devices. For example, a school that has limited network activity on weekends and holidays would only be charged for the parts of the network being used. A hotel would pay for the network based on occupancy and a stadium would no longer have to overpay for a network that was idle for large amounts of time.
Another benefit for customers is the assurance they are always at or near the leading edge of technology. Many organizations put off upgrading network equipment to avoid that big up front cost. This requires a trade off to be made of upgrading to the best equipment now or waiting another year or two and delaying the purchase. With a subscription model, the network can be upgraded every couple of years when the contract term has expired.
As is the case with all ALE solutions, this will be delivered via a reseller partner. NoD has automated, out of the box cloud management tools for the partners to offer the network as a managed service. This should be a huge boon for ALE partners, particularly those in North America where ALE’s brand is not all that strong. The ability to bundle usage-based billed applications with network infrastructure creates a unique, differentiated go to market that can match customer’s technology consumption models.
This is certainly a bold move for ALE but it’s a good one for a company whose market share is nowhere near the quality of the product it offers. NoD could get many customers that may never have considered ALE before to just try the product without having to make a significant financial investment.