* The varied ways carriers price MPLS services
In a previous newsletter, we discussed the fact that a number of IT organizations were implementing MPLS as a way to save money over their existing frame relay and ATM networks. Today, we will discuss MPLS pricing.
While we would like to provide very specific information about MPLS pricing, that is not possible for two reasons: not all carriers price MPLS services in the same way, and the actual price paid is affected by factors such as the size and length of the customer’s contract with the carrier. It is also affected by the customer’s goals for MPLS when it negotiated the contract.
Virtually all carriers have a pricing structure for MPLS services that includes a cost for the access circuit and the port speed. Most carriers offer and charge for a variety of advanced services including network-based firewalls and IP multicast. But there are always exceptions; for example, Sprint does not charge for IP multicast.
Most carriers also charge for the CoS (class of service) profile. While most carriers offer between five and eight service classes, we will illustrate the CoS profile by describing a hypothetical carrier that only offers two service classes. One of the service classes is referred to as real-time and is intended for applications such as voice and video. The other is called best effort and is intended for any traffic that is not placed in the real-time service class.
The CoS profile refers to how the capacity of the service is distributed over these two service classes. In most cases, if all of the traffic were assigned to the real-time traffic class that would cost more than a fifty-fifty split in which half the traffic were assigned to real time and half to best effort. A fifty-fifty split would cost more than if all of the traffic was assigned to best effort.
As ever, there are exceptions. Sprint does not charge for a CoS profile. In addition, we recently worked with a multinational company that had implemented a worldwide MPLS network using three different carriers. The company did not want to manage the complexity associated a CoS profile and was able to negotiate pricing with two of its three carries such that there was not a charge for a CoS profile.
More detail on the cost and management challenges associated with MPLS can be found in an Impact Brief on Webtorials entitled “Analyzing the Conventional Wisdom of Network Management Industry Trends”.
