Managing for maximum WAN value

How to make sense of wide-area service options and get the best bang for your buck – and your applications.

Private lines, frame relay, Internet, VPNs, Multi-protocol Label Switching: Never have enterprise users had more WAN options from which to choose. While the mix makes it more likely you’ll find services that fit your applications, the array of choices also can make it more challenging to ensure you are consistently getting the best value for your WAN dollar.

Companies are responding in ways that reflect their range of requirements. Quaker Chemical has used compression devices to squeeze more bandwidth out of its frame relay networks and now is moving to MPLS. Champps Entertainment chose to oust frame relay for a managed VPN service that cut the company’s costs by about 70% and increased bandwidth. George Washington University is buying up dark fiber and using it to connect to the Internet, and has enough headroom that it is looking at selling excess capacity. The commonwealth of Pennsylvania pooled its state buying power into one massive contract that enables it to get a DS-3 link for as little as $1,800 per month. At prices like that, no compression is required.

To determine which services make sense for your enterprise, Thomas Nolle, CEO of consultancy CIMI in Vorhees, N.J., recommends assessing each option in terms of its price, performance/stability and future trending. Leased lines would be classified as high price, high performance and stable, but with a gloomy future, meaning they are likely to become more pricey over time and more difficult to obtain as the number of suppliers decreases. Frame relay is moderately priced and offers generally good performance and stability. The price of frame relay is likely to decline somewhat going forward, but so is service availability, as fewer carriers offer the service. VPN services are generally low-priced, with relatively poor performance and stability, but there are a large number of providers from which to choose.

Steven Taylor, president of consultancy Distributed Networking Associates, says all of that might be moot if your network configuration determines the choice. Obviously, private lines and frame relay are better for point-to-point or hub-and-spoke configurations, while IP-based services might be better for distributed networks.

When it comes to drawing distinctions between services such as frame relay and MPLS as an alternative to private lines, it is often best to simply ask for quotes on all three and make your decision after the fact, says David Rohde, a senior analyst at TechCaliber. While there are a number of issues to consider, the decision might come down to which is less expensive.

The trick is to put the bid out to as many carriers as you can and to write an RFP that is specific about the level of service you need. “Otherwise, carriers will bid what they have,” Rohde says. “The variable is the quality of your RFP.”

Driving a bargain

You might be surprised to learn that private-line prices have fallen since last you checked, especially for higher speeds. “T-3 and OC-3 just don’t have that same ‘Oh my God’ factor anymore,” Rohde says. “Prices of $20,000 per month are just gone.”

In Pennsylvania, they are long gone. In May 2000, the state signed a five-year deal with an alternative carrier that is standing the test of time. Pooling 22 contracts garnered the state enough buying power to build a statewide SONET ring that connects more than 250 state buildings and 17 institutions of higher education. The smallest access link any agency has is a T-1, and most have OC-3, says Charles Strubel, the commonwealth’s acting director of the Bureau of Commonwealth Telecommunications Services. Each OC-3 costs only about $3,300 per month, and DS-3s go for about $1,800 – regardless of distance, he says.

Rohde is likewise bullish on the frame relay deals available, citing a “compression of the curve” trend that he says is accelerating. In the past, if a 56K bit/sec frame relay port cost $250, a T-1 would go for $1,500 to $2,000. Now the price difference between 56K, 128K, 256K and even 512K is marginal.

“And the price for T-1 is so much less than it was two years ago that you’ve got a real compression there,” he says. If your frame relay network is dominated by 56K and 128K ports, ask for a price at 256K. “It may not cost you much more. Try it again at half a T-1. Again, you’ll be surprised. That’s the way to optimize bandwidth at this point,” he says.

The VPN option

Unless, of course, you ditch your frame relay network entirely and go with a VPN, as Champps Entertainment did. Champps owns and operates 43 restaurants and franchises 13 others across the country. The company had paid about $700,000 per year for the frame relay network that tied those locations to the company’s Littleton, Colo., headquarters, says Steve Johnson, director of IT for the firm. “It was straining our IT bottom line,” he says.

When the company first installed the frame network in mid-2001, Johnson says he considered a VPN option, but wasn’t comfortable that it was secure enough. Now, with improved IPSec encryption algorithms, it’s a different story.

Champps opted for a managed VPN service from Netifice Communications that costs $200,000 per year. “Originally we had T-1 access with guaranteed 56K bit/sec frame relay, burstable to 128K,” he says. “Now we have [asymmetrical] DSL, IDSL or business cable, with 144K to 256K guaranteed. So we ended up increasing our bandwidth without trying too hard.”

He understands that the new setup isn’t likely to be as reliable as his frame network, but says he can accept that risk. “We don’t have to be online 24 hours to serve you a beer,” he says.

Still, Champps is in the minority in that it is employing a VPN for its enterprise backbone, according to Rohde. Most companies use VPNs for remote access, not as an alternative to backbone WAN links.

Nolle expects that to change as carriers redefine their VPN services, probably by next year. “VPNs will start to show price polarization, and we’ll see a separation of low-end and high-end services,” he says. “You’ll have IP services that are separate from the Internet. We’re going to see the creation of IP infrastructure in the facility model become a mandate for pretty much all of the common carriers.”

Web-services based applications will help drive this phenomenon, he says, because they are more tolerant of variables in network behavior than many existing applications. “If you have an application that is tolerant of variability, you’ll be able to deliver it over a service that has traded performance stability against cost,” Nolle says. By next year, he says he expects carriers will offer access, via a single pipe, to IP-based services that offer varying levels of performance.

MPLS movement

What carriers already are pushing is MPLS-based services, especially for international networks, Rohde says. MPLS is delivered in a fashion similar to frame relay, but without the concept of permanent virtual circuits, which are network paths that must be defined in advance. With MPLS, packets are routable, able to be shuttled from one port in the network to any other at will.

“No matter what you ask for, expect the carrier to say, ‘We can do this with MPLS,’ ” Rohde says. Given that, ask for it up front so you can better control the negotiations.

Quaker Chemical is one company that is taking the leap to MPLS after milking every last bit out of its frame relay network. The company, based in Conshohocken, Pa., has used frame relay to connect 17 sites – six in the U.S., six in Europe, two in South America and three in Asia – to its data center in the Netherlands.

Three years ago when it rolled out an ERP application the company faced the need to double network bandwidth to 512K bit/sec, says Irving Taylor, Quaker’s vice president and CIO. Instead, it opted for compression devices from Peribit Networks, which worked well enough to quadruple capacity, staving off the upgrade and providing a ROI in about six months.

Now the company is looking to MPLS to save more money – roughly 10% vs. the frame relay setup. Given MPLS will be delivered as a managed service, as is his frame relay network, the rollout should be painless for Quaker.

Taylor expects it will be easier to get MPLS-based services in outlying areas of countries such as China than it is to get frame relay links. He also can still use the Peribit compression equipment.

Big, big bandwidth

George Washington University, on the other hand, has no use for compression gear, packet shapers, filters or any of the other equipment meant to conserve bandwidth. “It’s less expensive for us to just get more bandwidth,” says David Swartz, CIO for the university, in Washington, D.C.

For virtually all of its WAN connectivity the university relies on the Internet, including the high-performance Internet2 network run by a consortium of some 200 academic institutions, Swartz says. The university is a founding member of the Mid-Atlantic Crossroads, a consortium that operates an OC-48 network in the D.C.-Baltimore area. Previously, the university bought OC-3 connections from its local carrier, but recently saw the price of dark fiber falling so fast it couldn’t resist buying it up and lighting it up.

“The cost is probably 10% of what it used to be,” Swartz says of dark fiber. “Once you acquire a certain amount, you can resell [wavelengths], and that’s what we’re doing. This may actually go from a cost center to a profit center.”

The university’s total costs are about the same, given the cost of the fiber, optical equipment and the personnel to operate it. “But we’ve probably got an order of magnitude more bandwidth,” Swartz says. “In the past we had to look at things like caches [to conserve bandwidth]. Now we just over-engineer everything.”

His advice to those in more remote areas where dark fiber might not be readily available: “Move to an urban area.” Fiber, Swartz says, is the modern-day equivalent of the rivers that drove the growth of major cities. “So I jokingly say that, but I’m not kidding.”

Desmond is president of PDEdit in Framingham, Mass. He can be reached via www.pdedit.com.