There’s no magic bullet, but here are some guiding principles to reducing costs while maintaining or improving service.
How can I reduce network costs?” If that question sounds familiar, you’re not alone.
Telecom rates are no longer in freefall. The 20% to 25% year-over-year drop in rates that we saw during the mid-to-late ’90s has vanished. Rates now are relatively stable, meaning next year you can expect to pay about what you paid last year, assuming you’re consuming equivalent services.
Therein lies the catch: You probably aren’t. Most companies have found bandwidth requirements are growing because of new applications and initiatives such as server and data center consolidation.
Unfortunately, companies often don’t consider the network impact of deploying new apps or consolidating servers and data centers. For example, server consolidation typically results in relocating a server from across the LAN to across the WAN. That means traffic that used to be local (high-bandwidth, low-latency and virtually free) is now long-distance (low-bandwidth, high-latency and expensive).
The upshot? Users see decreased performance, and network executives see higher bills.
There’s no magic bullet, but here are some guiding principles to reducing costs while maintaining or improving service:
Consolidate multiple networks. Companies often have dedicated networks for particular traffic types (voice, video, extranets or legacy applications). One firm we worked with had more than 30 networks, including dedicated extranets, an X.25 network that handled one legacy application, and multiple voice and data nets. Try integrating applications wherever feasible across a common infrastructure, and remember that cost-savings are cumulative: Combining voice and data might not show enough of a savings to warrant revising your network architecture, but toss video into the mix, and the picture might change.
Use quality of service and selective oversubscription to wring more performance out of existing links. On dedicated lines and with most VPN technologies (such as frame relay ) you’ve already paid for the bandwidth so you might as well utilize it as much as possible. By deploying QoS at the access points, you can expedite the transfer of mission-critical apps even when the WAN is congested, while saving the bulk file transfers for slower periods. If you try this, make sure to benchmark application performance and network utilization first – then shoot for maintaining application performance while increasing utilization.
Explore compression. Most of us stopped thinking about compression back when we tossed out our V.32 bis modems. But compression is back, and a new generation of tools such as the SR products from Peribit can increase effective bandwidth up to 5X, according to Peribit’s internal tests.
Renegotiate. Although rates have stopped dropping, if your contract is at least 18 months old, you can probably wring a few concessions from your service provider – perhaps by offering to throw more of your business their way. (But don’t lock yourself into long-term contracts.)
Above all: don’t give up. There are many ways to save, if you know where to look.
Johnson is president and chief research officer at Nemertes Research, an independent technology research firm. She can be reached at johna@nemertes.com.
