Many content service providers (CSPs) have discovered the advantages and major cost savings of building and managing specific sites within their own networks versus leasing managed service wavelengths.
Because key points in the network are now requiring cost evaluation due to bandwidth growth, CSPs are using a TCO model that compares outsourcing with a build-it-yourself approach to evaluate each route installed. Based on these inflection points, CSPs can start in one metro area, experience the benefits, and evaluate the next area of their network for optimization.
Managed wavelengths are expensive and have hidden costs such as IRU taxes. As additional bandwidth is deployed, the additional cost is linear, often becoming untenable at certain breaking points. In addition, slow services and lack of urgency from managed service providers leave CSPs lacking control over their own network, especially when faced with unplanned bandwidth upgrades.
Benefits and Drawbacks of a Managed Service
The benefits and cost savings associated with branding, legal protection, security, expertise in technology, global connectivity options and service choices - network-related benefits which up until now were beyond the budgets of companies - contributed to the viability and affordability of managed services, making it a logical delivery option for CSPs. A CSP deploying additional bandwidth will find their monthly payments increasing dramatically with managed services. These issues alone are enough for most CSPs to take the next step and examine the business case for moving from an outsourced model to building it themselves. But with the availability of affordable protection and restoration services as well as the low cost and savings of leasing dark fiber, especially in the metro, companies are increasingly bypassing managed services and instead building and managing their own networks between data centers, peering points and POPs.
Benefits and Drawbacks of a Build it Yourself Network
For CSPs, the private network solution enables them control over network upgrades, expansions and extensions at a much lower cost point. Building the network themselves puts the control of personnel, resource allocation, costs, capacity issues and decisions back into the hands of the company. CSPs can utilize breaking point metrics for their high bandwidth routes and easily deploy and upgrade with security and latency firmly in their control. And although there are challenges with deploying your own network such as negotiation of RTU spots, inefficient use of equipment if bandwidth is low, your personnel and networking group are now making the real-time decisions related to your infrastructure and network.
The Business Case Analysis - a Total Cost of Ownership
The tipping point decision criteria to build versus outsourcing a network is based on dark fiber equipment and regional wavelength costs. The CSP must evaluate the economics of each route, including current and forecasted bandwidth, in a price matrix and compare this to the managed service offering. When the TCO is complete, often major cost savings become apparent and are very compelling. To date several BTI customers have found at least 60% savings in a three year period by moving from a managed service to deploying their own rapidly growing network. Often, payback is within the first year or two, and first year costs are lower than the original managed service offering.
BTI provides unique, responsive and flexible solutions for your network building requirements.
BTI's Intelligent Cloud Connect integrates massively scalable packet and optical features into an open platform that seamlessly integrates network analytics and application awareness.
For more information on the BTI Build vs. Buy TCO contact: firstname.lastname@example.org
By Dr. Robert Keys, Chief Technology Officer, BTI Systems
Content and service providers are facing challenges as they scale their networks to support daily demands from consumers and businesses. Complicating these demands is an impatient public - for example, a 100ms delay costs Amazon 1 percent in sales and Bing found that a 2 second slowdown reduced queries by 1.8% and revenue per user by 4.3%.
The challenges they face are primarily:
- Delivery of timely and differentiated cloud services
- Better utilization of expensive resources in the network
- Reduction of OPEX and CAPEX costs
- Keeping up with scale and capacity demands efficiently
Areas that can most impact and improve performance and scale in the cloud - and are correspondingly ripe for improvement driven by new software and system innovations - include:
- Increasing application awareness
- Improving network analytics
- Automating control of the network by leveraging SDN approaches
- Reducing layers of complexity
- Driving scale and performance
Large content service providers are already tackling these issues by leveraging flexible SDN-enabled platforms that deliver network intelligence, analytics and massive scale, density and increased performance, at significantly lower OPEX and CAPEX costs.
There has never been a better time for content and service providers to assess their cloud network opportunities and deploy new solutions and strategies to optimize incoming revenue streams. For more on this subject, see the article in Lightwave Magazine.
Eve Griliches and Sally Bament, BTI Systems, discuss BTI's new Intelligent Cloud Connect and how it enables content, cloud and service providers to overcome the performance bottleneck created by the exponential growth in traffic flowing in and out of data centers as a result of the dramatic demand for cloud services. An open, SDN-enabled networking platform combining routing, optical and applications intelligence, Intelligent Cloud Connect is designed to meet the stringent performance, scalability, operational efficiency and service innovation demands of the cloud.
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Renowned for architecting the world's first business-class IP local network, Cbeyond is an award-winning provider of technology services to companies in 60 countries. Headquartered in Atlanta, the company delivers cloud services and communications through its enterprise network and data centers.
Earlier this year, Cbeyond launched a strategic initiative to expand its network so customers could gain faster, more secure access to advanced technology, like cloud services. The company sought a technology partner that could nimbly support its multiphased business strategy. After evaluating other major networking vendors, Cbeyond chose BTI based on its ability to provide end-to-end network visibility, and seamlessly integrate into its existing IT infrastructure to support rapid service provisioning. Read more