Aggregation more network for your money

Aggregation more network for your money

Tom O’Hagan of Virtual1
Tom O’Hagan of Virtual1

Resellers looking for network services solutions for their customers can rarely find a ‘one size fits all’ solution from a single carrier and a new breed of supplier is taking advantage of that situation by supplying solutions from a wider selection of carriers and interconnects.

There’s a definite trend away from the ‘one size fits all’ approach to connectivity often characterised by the larger carriers towards getting the right product and service for endusers. It is here that the network aggregator can offer the reseller a choice of interconnects and services that can be tailored to customer need.

Tom O’Hagan is Managing Director at Virtual1, a channel-exclusive network aggregator.

“Network aggregators have been operating in the UK for some time now, yet I often find that when I’m talking to a new prospect, I still have to explain how aggregation works. Fortunately, the best description is also a simple one. Firstly, an aggregator is a network operator in its own right, and owns its own core infrastructure. It then uses this network to interconnect into other major Ethernet and copper carriers, both nationally and internationally. Put simply, this means that by its very nature, an aggregator can offer access to a far wider network footprint than a traditional carrier.

 

“From a technical perspective, of course, there is much more to be said. For example, at Virtual1, our core infrastructure is fully redundant, built using multiple PoPs, resilient dark fibre and employing resilient interconnects with our carriers, to ensure the highest levels of service availability for customers. What’s more, all access mechanisms are available, including Ethernet, at every location. Then there is the network itself. An aggregator takes only the ‘raw’ connectivity from each carrier and then adds its own value. At Virtual1, our entire network is both MPLS and VPLS-enabled so resellers can deliver any WAN solution their customer requires. We also provide free QoS as standard on our network and the option for internet break out from the core or a site of the customer’s choice.

“The network is then ready to run any type of IP network connectivity, nationally or internationally, Managed or Wires Only – indeed it can also be run as a multiservice connection, simultaneously providing a WAN, SIP and Internet link.”

Cherie Everett, Head of Marketing at Griffin tends to agree with O’Hagan’s definition of an aggregator when she says, “The true IP aggregator will have their own MPLS core and network intelligence but will buy raw connectivity from all of the leading Ethernet, PPC and xDSL carriers. In this way the reseller and their customers have access to thousands of POPs (Points of Presence) often at a lower price than they could buy from the carriers direct. Many of the more agile aggregators that have a focus on developing their MPLS products will maintain a constant lead in the market because they will keep bringing out new features that help the reseller differentiate when competing against carriersold or re-sold products. Those that go a step further and invest in understanding the evolving needs of the end-user businesses will make fewer mistakes when deciding on new features, timing and price.”

Carl Churchill, Managing Director of Daisy Wholesale, “An aggregator is very much the business creating value between the larger carriers and resellers and in our opinion provides an invaluable service to the channel assisting resellers in a quick route to market with a comprehensive range of services managed through a common support and commercial relationship.

“The role of an aggregator is to maintain strategic relationships with the primary carriers; hand-picking best-of-breed services across the whole industry and then consolidating and aggregating these products and services within its own network.

“These products and services can then be passed on to the aggregator’s reseller base, enabling the reseller to be competitive on price and to choose elements of the offers which suit the needs of their own end-customers.”

 

Reseller Benefits

Cherie Everett, “Partnering with a white label aggregator not only leaves the ownership of the customer squarely with the reseller but they are also free to decide their own pricing and margins. Working with a trusted channel-only supplier means they are able to involve the aggregator’s expert sales and technical pre-sales staff directly with the end-user, increasing the probability of winning the contract.

“Switching customers between networks is normally a costly and disruptive process involving MAC codes, router reconfigurations and log-in changes. A reseller using an aggregator is able to switch between carriers without having to change the log-in details and IP addresses of their customers therefore reducing any disruption or potential churn e.g. an end-user using Opal reads that O2’s network is the fastest and wants to try it. Using the same addressing over many networks also means that the reseller can install redundant solutions for their customers. For example if a customer is concerned about the standard SLA available on DSL then the reseller can install one broadband line from BT and one from an LLU supplier running in failover so that if either route fails their customer stays online.”

Tom O’Hagan, “Most importantly, the geographic footprint and wide range of services means resellers really can build the ideal solution for their customers. As an aggregator, we can easily and effectively use eight, nine or ten-plus different carrier networks to create a single solution. Every solution is bespoke and no two solutions are ever the same. Next, an aggregator should always beat a carrier in terms of cost. A carrier will always want to sell their own network, they undeniably need to ‘sweat’ their asset. An aggregator has no such obligation, and can simply leverage the assets of each carrier as and when it is most effective for their customer.

James Palmer of Nine Telecom
James Palmer of Nine Telecom
 

“The ability to assure network availability is also an important consideration. Downtime is becoming more and more of an issue for businesses, but an aggregator can provide advanced network resiliency by installing different access mechanisms with different providers across a customers’ network. From another perspective, an aggregated network provides the ideal connection for SIP – at Virtual1 we privately peer and interconnect into SIP providers: the traffic doesn’t go over the public internet so we can guarantee the quality of the call.

“Finally, it is the simplicity of dealing with an aggregator which many Channel members find appealing – we deliver a single network with a single account manager and a single SLA, making management not only more simple, but less time consuming too.”

Carl Churchill, of Daisy Wholesale, “The aggregator offers much more than just products and services; it offers the added value of expert advice and support as well as, certainly in the case of Daisy Wholesale a degree of product evolution taking the base carrier services and developing features and functionality on top of those.

“For example, many of Daisy Wholesale’s resellers come from a traditional voice background. They know there is value in data solutions such as Ethernet, MPLS and broadband but do not know how to go about adding them to their portfolios.

“As an aggregator, it is our task to ensure that our resellers are firstly educated in what these new products and services are, by offering essential information and training, and then following this up with support as resellers look for avenues in which to sell them.

We have invested a lot of time and money in our support infrastructure to ensure our resellers can maximise the profitability of their own businesses without experiencing a huge outlay of costs.

With convergence high on the agenda, there is currently a huge opportunity for our resellers to cross and up-sell both voice and data products into their existing customer bases and we are here to help them recognise and take advantage of these opportunities. It’s the leading aggregators in the industry, such as Daisy Wholesale that are allowing resellers to take advantage of next generation services in a way that is low impact in terms of operational and technical drain and investment but delivering exceptional, sustainable and high value opportunities.”

“SaaS, fixed mobile convergence and virtualisation will prove to be the big opportunities for our resellers this year, and we will be launching services that address these requirements and providing the support and assistance required to address and capitalise on those opportunities.

James Palmer, CEO at Nine Telecom says that the aggregator can offer much more than one solution for the reseller.

“For example, aggregators assist in the competitive environment by providing good prices that resellers could not get from carriers directly

“Nine Telecom is an aggregator with a high service wrap. Consider a reseller wanting to deal with three carriers and say five different providers of broadband. That’s a total of eight different supply agreements, eight different account managers to deal with and eight sets of account administration. That’s quite a workload for any reseller. Spreading all your business across eight suppliers means you won’t be getting the best prices. However, placing all your business with an aggregator such as Nine Telecom means you not only get the best solution for your customer but also the best prices. Every one of those eight suppliers will have their ‘sweet spot best products’ and an aggregator can access all of those for the reseller.”

 

Current opportunity

Cherie Everett of Griffin, “Resellers should focus initially on their existing customers since our experience is that many SMEs would rather take their first steps into private MPLS networking with a trusted incumbent. Also, look for customers that have a carrier MPLS network coming out of contract. These are expensive, clunky to manage and often poor at supporting things like broadband and Internet break-out/break-in. In particular look for customers that want to bring in home workers, small sites or retail outlets. Most traditional MPLS products are very poor at managing large numbers of network assets and their DSL options are limited and expensive. Some of the agile MPLS solutions supplied by aggregators offer far more cost-effective solutions and automated network management and provisioning tools.

“Any customers that operate a traditional leased line network are great prospects. Ethernet will be a lot cheaper in comparison and connecting into an MPLS cloud will often reduce the number of connections required and improve functionality and reliability.”

Carrier Perspective:

According to Dan Cunliffe Head of BE Wholesale, there is a common misconception around aggregators. “Many people in the channel are unable to distinguish between an aggregator and the wholesale carrier networks.

“In my view it’s simple; carriers are the big players who own and operate their own network within the channel, as well as the equipment within the exchanges. Effectively carriers have invested in being able to control and deliver unique products up to the exchange. Until recently these have been limited to BT, Cable and Wireless, Tiscali (part of the TalkTalk Group).

Cherie Everett of Griffin
Cherie Everett of Griffin
 
“An aggregator on the other hand is an ISP/Reseller that has more than one carrier supplying them with connectivity. They are not the network owners instead they act as a one-stop shop facilitating business needs and enabling their customers to get the most out of the network carriers providing that all important value add. In some cases larger resellers may forge direct relationships with the carriers cutting out the aggregators; however this seldom happens as aggregators do a great job of offering the channel the choice of all the carrier networks plus the value add of a slick integration.”
 

Aggregation in Action

Ian Fishwick, CEO of Adept Telecom says that in Q4 of 2010 almost 50% of their order intake related to data networks and all of the biggest wins involved Adept using a different data supplier each time.

“It has taken us about two years to work out which suppliers are best in which situations. We started off by selecting just two preferred suppliers: one for ADSL and one for larger data connectivity or networks. This just didn’t work.

“Different customers have different priorities and there isn’t one data supplier in the UK who is good at everything. Some typical customer requirements include cheapest possible broadband, migration of existing broadband without new routers, usernames and passwords, lowest cost pointto- point connectivity and MPLS networks linking connections from various carriers

“All credit to the data network suppliers as their range of offerings and price points is getting better and better each year. Only some of the former fixed line companies will make the transition to being voice and data companies, but like most journeys it takes longer than you think to become good enough to start winning major networks like AdEPT has.”

 

Sound Bites

Michael J Thornton, Sales & Marketing Director, Frontier Voice & Data, “With data it’s important to remember that a ‘one size fits all’ approach doesn’t work. The data needs of many businesses now are so sophisticated and diverse that they cannot be met by one network service provider alone. There is also the issue of moving between suppliers for a cost advantage.”

Daniel Crespi of Telcoinabox, Customer ownership has previously meant doing the full workload that comes with owning the customer, i.e. provisioning, billing, payment processing, customer service and so on. This is no longer the case with companies now offering to do all of these services, in fact specialising in those services alone, allowing the dealer to only focus on sales and marketing and now have 100% ownership at the same time.

Sachin Vaish, Director of Vaioni, “The problem you have with a single network provider is they are fixed on selling their own network, so the interest in ‘am I filling the requirement adequately and doing the best by the customer’ sort of goes out of the window or putting it more politically correct, cannot always be considered.”

Steve North of Stripe21: “An aggregator is a Service Provider who can interconnect best-of-breed networks to deliver managed services. Stripe21 for example, not only connects to BT for 21CN, but also several LLU operators for high-speed access technology across the widest possible geographic area, to support managed VPN and Internet applications. “

 

Ed Says…

Look for a supplier that not only provides you with connectivity options from all the carriers but also that is channel-only, so won’t compete with you and also that makes it easy for you to uncover high margin opportunities, order and support the services sold, enabling you to build closer more profitable relationships with your key customers.