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Can enterprises trust the internet?

Oct 24, 20237 mins

Enterprises IT pros who trust the internet as an MPLS VPN alternative say MPLS is more reliable but the difference isn’t worth the cost.

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Dependency and trust have a complicated relationship, and that’s especially true with regard to enterprise views on networks. If you ask enterprise executives what network service has been the most transformational for their business, almost 100% will say “the internet.” If you ask them what network service has created the most problems for them, you get almost exactly the same response. The internet, they tell me, is insecure (87%), unreliable (81%), and lacks service quality (77%). And yet its loss would create “a major business disruption,” according to 97% of those users. Do you sense contradiction here? Well, we’re just getting started with that question.

Starting with money is always a smart idea. Over the last three decades, the cost per bit for consumer broadband has plummeted. You can get a 100 Mbps consumer broadband internet connection for less than $40 in many areas. In contrast, a dedicated-access internet business connection with the same speed, using fiber or carrier Ethernet, costs more than 20 times that much. An MPLS VPN connection is 20-35 times as much, according to 121 enterprises I’ve checked with. In areas where business density is low, the cost of dedicated access internet or an MPLS VPN can be far greater than these averages because of the lack of suitable access infrastructure that “passes” sites, if the service is available at all.

It’s no wonder that enterprise CFOs often have a hard time accepting network prices. One senior network planner at a healthcare conglomerate told me that he got major pushback on a 500 Mbps MPLS VPN connection cost of more than $4,000 per month when the CFO had 1 Gbps home broadband at just over $100 a month. But the deal was approved, because the CFO accepted a simple justification: “You can’t trust the internet.”

Cost comparison: MPLS VPN, dedicated-access internet, consumer broadband infrastructure

The problem is that enterprises are trusting the internet, more and more every day. We can compare the experience of the enterprise that paid $4,000 per month for a 500 Mbps MPLS VPN connection with another enterprise to demonstrate that the classic trust argument against the internet is looking increasingly weak.

The healthcare conglomerate went for the 500 Mbps MPLS VPN connection at a particular location that served 24 employees, a third of which were medical professionals. A different medical conglomerate in a similar area used dedicated-access internet at the same speed and paid $1,300 per month. I couldn’t find a similar medical site that connected via consumer-broadband infrastructure (cable or telco fiber), but I did find one that connected financial service sites of comparable size using both 500 Mbps and 1 Gbps service. They paid an average of $110 per month for connections.

All three of my sample sites said their network services were “satisfactory.” The consumer-broadband site reported four periods of service outage in six months, the direct-access internet site reported two, and the MPLS VPN site had no service outages.

If you ask enterprises whether going from four outages per six months to zero justifies a cost increase of about 37x, most will ask how long the outages were. In my sample sites, the consumer-broadband option’s outages were less than 10 minutes for three of the four, and the longest was 45 minutes. The direct-access internet sites’ outages were all less than 10 minutes.

In the group of 121 enterprises I’m referencing, there was a general willingness to tolerate outages of less than 15 minutes, even at a rate higher than four per six-month period. On the other hand, only a third of enterprises said they would tolerate four outages with an average duration of over an hour, and none said that they’d tolerate outages with an average duration of over two hours without seeking a service alternative. If we compare tolerance with the experience of the three enterprises I’ve cited, all the services fell within tolerance.

Then there’s the question of the internet for connection outside of secondary sites. All the enterprises say they “depend on the internet” to reach and support prospects, customers, and partners. While 14 enterprises in the group said that cloud provider outages had impacted their outreach, none said that about the internet. For this highly critical mission, apparently, the internet’s best-effort is good enough.

How about connecting workers, either in branches or in remote locations? Well, 97 of the 121 enterprises said that, overall, they didn’t trust the internet as an alternative to MPLS VPNs, though 104 said they’d consider it for sites where MPLS VPNs were too expensive, and of course all said they would consider it where the MPLS option was unavailable. Then consider that of the 35 who said they were using the internet and cloud to connect remote workers, only 3 said that the results of that were “unsatisfactory,” and of course the worker-to-cloud connection was made via the internet. Also consider that of the 26 who were currently using SD-WAN over the internet for some branch connectivity, only 5 found that service was problematic in some sites, but all but 6 were using a form of managed SD-WAN service from an MSP or CSP. There were two of that group who found internet performance problematic; the other three had built their own SD-WAN.

One of the interesting things about the managed SD-WAN users is that the cost of managed SD-WAN service is considerably higher than the cost of consumer-infrastructure business broadband, and yet the majority of SD-WAN users elect to take that path. These enterprises say that a managed SD-WAN service eliminates the problems they’d have dealing with local ISPs in all the locations, and that they were concerned about ISP support for their applications. But of the 35 who use the cloud and internet to support remote workers, 11 had sites where they used managed SD-WAN services in the same geography, and the same ISPs were making connections to their prospects and customers.

Balancing reliability and cost

It seems we don’t trust the internet in general, but we do trust it specifically? This not only sounds confusing, it sounds illogical, as though enterprises have a deep-seated distrust for the internet when their own data doesn’t support the view. To try to wrestle some sense of it, let’s turn to the 23 enterprises who did trust the internet as an MPLS VPN alternative. Why do those who overcame internet distrust believe that internet trust is so hard to come by. It comes down to a kind of popular mythology that one called “the myth of the five nines.”

Everyone, so they say, knows that telecom services are supposed to have five-nines availability, though only a bit over 40% of enterprises believe that’s true today. Everyone knows the internet doesn’t. Popular wisdom is also what gives rise to fairy tales, but we should suspect this statement not only for its accuracy but also for its relevance. All 23 of those internet-trusting folks said that yes, MPLS was more reliable, but that the difference wasn’t worth the cost. That argument was made by every one of the group to their CIOs and CFOs. In some cases, they buttressed it with a managed-service promise. In some, they priced in a wireless backup or (in two cases) a second ISP. Exactly half of those who included a backup dropped it in all, or a majority of, sites after the first year. None went back to MPLS VPNs.

I think the conclusion here is inescapable. Enterprises’ own data shows that they can trust the internet, and indeed are trusting it for the most business-critical missions of all—connecting their business to their prospects and customers. The real issue is whether they can justify the trust. And our group of 23 had some insight on that point too. All of them became internet-connected two years ago or less. Why? Because the cost difference was simply too great to be ignored any longer. Guess what? It’s getting bigger, and harder to ignore every day. Enterprises, apparently, are going to get a lesson in trust, whether they like it or not.


Tom Nolle is founder and principal analyst at Andover Intel, a unique consulting and analysis firm that looks at evolving technologies and applications first from the perspective of the buyer and the buyers’ needs. Tom is a programmer, software architect, and manager of large software and network products by background, and he has been providing consulting services and technology analysis for decades. He’s a regular author of articles on networking, software development, and cloud computing, as well as emerging technologies like IoT, AI, and the metaverse.

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