What: Money

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Follow the money, and you will discover the secrets of MPLS marketing. There is a lot of telecommunications money out there – even within a tight economy. Market studies from 2002 reveal not only that carrier spending is slowing down, but also that the Enterprise market continues to grow (see Figure 9.7).

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Figure 9.7: State of Carrier Market

There are several reasons for this inverse correlation. First, a large number of carriers are already “on board” with MPLS. Second, the recent slowing of the economy has limited capital expenditures. Enterprise is still growing because they are consistently exploring ways of reducing their expenses. A popular belief is that a capital expense this year will be returned many times over, via operational savings, in future years, regardless of market outlook (see Figure 9.8).

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Figure 9.8: Strategies for Growth and Marketing

Although sales have declined, current market projections indicate that the VPN market will exceed $40 billion by the year 2004 (see Figure 9.9).

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Figure 9.9: VPN Sales

Carriers are still able to generate revenue – the majority of it coming from their voice circuits (see Figure 9.10).

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Figure 9.10: Carrier Revenue

Carriers like Qwest have capitalized on MPLS and, as a result, are able to offer several levels of service under the management of one carrier. They provide their end users with a “one-stop shop” (see Figure 9.11).

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Figure 9.11: One-Stop Carrier Shop

This one-stop shop can be installed between any two points of a network. Figures 9.12 and 9.13 show that there can be several demarks for service providers. The core provider can offer MPLS service; in addition, each tier of the Internet, from a tier-one provider to tier three, can be served under this version of a carrier agreement.

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Figure 9.12: Marketing Areas

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Figure 9.13: Core Provider Marketing Areas

Strict carrier-service sales in the MPLS market have been slow; however, behind the economic cloud, we can see the VPN rainbow (see Figure 9.14).

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Figure 9.14: The VPN Rainbow

The VPN market is currently the driving force and lifeblood of MPLS. In Figure 9.15, we see that customers want MPLS with a projected 58% growth, and that additionally, they want the ability to add new services.

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Figure 9.15: Customers Want Value Added Services

Figure 9.16 shows the five major drivers behind VPNs and the ability to have fully meshed global services – a promise of ATM, but less expensive.

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Figure 9.16: Five Major Drivers Behind VPNs

In Figure 9.17, we find the projection that ATM sales will decline sharply, to be overtaken by MPLS within three to five years. MPLS is projected to have a life cycle in excess of seven years.

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Figure 9.17: ATM Sales Projections



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Rick Gallagher's MPLS Training Guide. Building Multi-Protocol Label Switching Networks
Rick Gallahers MPLS Training Guide: Building Multi Protocol Label Switching Networks
ISBN: 1932266003
EAN: 2147483647
Year: 2003
Pages: 138

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