Start-up looks to undercut frame, IP VPN prices

Start-up StraitShot Communications this week is expected to launch its first service, which the company says will give business users a less expensive alternative to traditional frame relay and IP VPN offerings.

Consolidated Private Networking (CPN) is a fully managed, protocol-agnostic service that provides private end-to-end network connectivity over networks operated by StraitShot and its partners.

The service includes provisioning, installation and management of customer networks, including local and long-haul connectivity. A customer could have a 10-site network, with five connecting via DSL, two via frame relay and three via dedicated T-1 lines. While supporting a variety of local-access technologies, StraitShot's network never traverses the Internet, the company says.

"Individuals are seeing an opportunity to generate new and different VPNs with different value propositions . . . for enterprises to consider," says Michael Suby, program manager at consulting firm Stratecast Partners. "It's good for competition."

StraitShot is teaming with a handful of local carriers, including Covad Communications, MCI, New Edge Networks, Sprint and WilTel Communications, which lets the company offer competitive rates in cities throughout the country.

The local connections are made to a StraitShot point of presence or to the local carrier's network, which then backhauls the traffic over a leased fiber facility to a StraitShot POP.

"Most users will realize a 30% to 60% savings" over traditional frame relay or IP VPN services, says Marc Coluccio, CTO at StraitShot.

StraitShot might be able to offer these types of cost savings because it is not operating an extensive network of its own. Today, the service provider has only one POP, in Sunnyvale, Calif. The company says a second POP will be deployed in New York by September.

Suby says that for potential customers, "it's advisable to be conservative" about shifting over large amounts of corporate traffic initially. "I would evaluate services on a trial basis, because [StraitShot is] a young company and because they are delivering services in a different manner than most users are accustomed to," he says.

While StraitShot says it uses Ciena and Quarry Technologies gear in its POP to support its ATM backbone, it would not provide additional details, citing a pending patent based on its network architecture.

One customer, R.W. Beck, questioned StraitShot about its single-POP architecture, and says it carefully is testing all connections before moving to the new service.

R.W. Beck, an engineering and consulting firm for the utility industry, is replacing its five-node frame relay network with the service provider's CPN service in Boston, Denver, Nashville, Orlando and Seattle.

"We're doing voice over IP and we're running into performance problems over our frame relay network," says Don Bird, director of IT at the Seattle company.

R.W. Beck had two T-1 and three 512K bit/sec frame relay links with committed information rates of 56K bit/sec with another provider. The company has upgraded each site to full T-1s from StraitShot and cut its monthly service rate by 50%.