In the wake of every firm we talk to claiming to have their own network and infrastructure Comms Business Magazine asked Matt Townend of illume Consulting to cast a more critical eye over the market to separate the wannabees from the real players.
When I was at PIPEX in the early days of the internet, it was fairly simple for a reseller to understand who they might go to when choosing a network provider, as you had a choice of the larger Tier 1 providers such as BT or Cable & Wireless or a more specialised ISP such as PIPEX, Zen or Demon. As the choice was pretty limited you tended to consider their network capability, product & service offerings and their technical capabilities.
Now, fortunately or unfortunately, everybody has ‘their own’ network. You can still purchase services from the above but also from; Mobile Operators, PBX Distributors, Applications providers (SIP, Hosted UC) or Larger Resellers. In this article we talked to some Key providers to better understand what you should really consider when deciding whom to partner with and what actually does make them different.
To get a view from the industry we were able to speak with BT, Zen, TalkTalk and Gamma. In these discussions there were some common themes that emerged from these discussions;
- Networks are still very different
- The link between Application & network
- Customer and channel requirements can differ greatly
Networks are still very different
In the UK we generally know that outside some major cities and specific geographies there are only a couple of providers who can provide the last mile connectivity between the exchange and the premise. Indeed because of this BT Openreach is regulated to provide these on an equitable basis to all providers.
So if the last mile is going to be the same independent of whom you choose, where are the differences? Well, the first area of difference is that some providers have chosen to unbundle the local BT exchanges, putting their own equipment into exchanges therefore enabling them to provide different services and have an inherent different cost structure. This is a very capital-intensive process and has only been undertaken by a few providers on a really national basis.
When we spoke to Zen’s James Griffin, they had seen value in doing this but only in certain geographies where they thought it enabled them to offer enhance offering. Alan Mackie from Gamma did not see as much value in investing this area as he said that Tail circuits are readily available and with the emergence of new local loop technology, he saw more value in investing in other areas.
As we move to the core of the network it was highlighted that different providers have very diverse approaches and assets in the core of the network. Some providers are really just aggregating others infrastructure and not really owning any of the assets. All four of the providers we spoke to highlighted that they thought ownership and ability to manage and maintain network infrastructure was key to offering a reliable service.
Gamma’s Alan Mackie said; “Its important that a provider owns, manages and maintains a large proportion of their infrastructure, this includes their own Data Centres, Core Fibre, Pops, Interconnects, Data and Soft Switches in order to offer an end to end service level.”
Zen’s James Griffin, Head of Product Management, also stated; “Running your own network capability was key,” and he highlighted the requirement to invest in technical expertise was crucial to manage the quality you offered customers. He mentioned large ISPs often run the network so hot by oversubscribing users and allowing congestion, where as Zen had a policy of quality and no congestion.
So it appears that in the core of the network, the assets and the service offered by providers can be very different, with providers having differing levels of control over the service they can really offer. So depending on your drivers as a channel, it maybe worth exploring what assets the network provider currently control and what service level they can effectively offer you and influence.
The other topic area, which was raised not surprisingly by the providers, was the importance of network coverage and reach. With Paul Beacham from BT Wholesale mentioning that a reseller really only wants to deal with a small number of network partners that can give then true national reach.
The Link between Application & Network
Many Service & Application Providers will tell you that it’s important that you purchase your cloud and network applications from the same provider who provides the network to you. Indeed, the emergence of SIP and Hosted UC services has lead to nearly all the providers of these applications now also offering you a network option.
In general, the service providers we spoke to stated that the link between application and network was important specifically for certain applications and certainly not for all.
Jon Nowell, Head of Product Management at Talk Talk stated, “In many cases the link between network and application is not necessary and this can only be good for cloud adoption and mobility. However, for performance and security sensitive services such as SIP trunking this is still the case – to do anything else is a case of running before you can walk.”
Paul Beacham, GM of Ethernet Products at BT Wholesale, also echoed this view when mentioning that certain applications had specific network requirements and the choice in terms of the access options and how the network would be deployed makes the link between the network provider and application really important.
Alan Mackie from Gamma said they have some channel customers where the end customer has their own MPLS infrastructure, and all they will want is to interconnect to Gamma for the application. On the other hand, they have other customers who do not have such an infrastructure and will benefit from a fully managed Ethernet service to access the application.
So for certain applications, there appears to be a clear benefit in purchasing the network and the application from the same provider however for a number of applications you should be just looking at which network provider can provide you with the highest quality most flexible service maybe more important.
With increasing network capability we are already seeing more and more ‘Over the Top’ services appear, so channels and service providers may want to focus on offering a small set of tightly integrated applications where clear value can be generated and then investigating offering over the top services to fulfill other customer requirements.
Customer and Channel requirements Differ Greatly
The providers all obserbed that they see very different requirements between both end customer businesses and the channels servicing them.
One of the interesting trends is to service customers who want the ability to flex their capacity to meet their changing environment. With the growth in cloud services the network requirement a customer may have this year or even this month may change greatly as soon as next month. Beacham from BT highlighted that they had a lot of requirement for the ability for customers to increase VLAN capacity and indeed this had been key in their product, where customers can make that change within 30 minutes. With new bandwidth rich technologies such as fibre, providers and channels may explore models where they provision higher than required bearer technology and flex the bandwidth required.
The other requirement, which was also mentioned, was resilience, as end customers put more and more business critical applications in the cloud they need to be sure that the network service is up to the job and has appropriate resilience options.
Zen’s James Griffin mentioned that he thought there were almost two types of customers reseller are selling to; customers who just require cheap commodity based bandwidth or customers who are viewing the bandwidth as more of an enabler to deliver key business applications.
I think with the emergence of fibre and the move to cloud applications the choice of Data Network partner is going to become of increasing importance to the partner community. I actually think we may ultimately see less people in the market offering these services, because the pressures to deliver a high quality services where you can really influence the customer experience offered will require significant investment both in physical network assets and skills. I also think there will be an increasing focus on what are you really providing as a network provider, so we may have seen the end to a lot of new entrants to the Data Network market who have very little assets and are effectively aggregating other peoples access.