What About the Enterprise Market?

The enterprise market is evolving from traditional transport services, such as leased line and Frame Relay, to IP VPNs. According to the most recent IDC surveys of corporate WAN managers, IP VPNs are the second most common choice for U.S. companies' "primary WAN technology," trailing only Frame Relay and having surpassed leased lines in late 2002. One-quarter of these enterprise customers subscribing to Frame Relay asserted that they have plans to migrate traffic away from their Frame Relay networks over the next one to two years. In Europe, IP VPN has surpassed Frame Relay but not leased line. One-third of these enterprise customers subscribing to a private line today plan to migrate within a year to IP VPN, with one-third of those migrating to a service providermanaged IP VPN.

Service providers will continue to use IP/MPLS to carry legacy services transparently as part of their evolutionary service strategy. These factors present an opportunity for both service providers and enterprise customers to leverage IP/MPLS as a new service opportunity. For the service provider, IP/MPLS can facilitate quicker time-to-market service delivery to enterprise customers who subscribe to these services. Conversely, the enterprise customer can use IP/MPLS to reduce WAN costs or offer services internally to various departments or subsidiaries. However, enterprise organizations are using MPLS to develop virtualized architectures to scale WAN/LAN, campus, and data center resources.

Service Provider Business Engineering

Service provider business engineering processes can often be complex and cumbersome due to years of supporting multiple OSS platforms. Such complexity affects service creation due to the challenges to reduce OPeX and the requirement by customers (with global subsidiaries) to ensure end-to-end quality of service when transiting multiproviders. Using IP/MPLS for service automation presents an opportunity to reduce such complexity. Work is underway in the industry to explore multiprovider service constructs. Examples include the MPLS and Frame Relay Alliance (MFA) (MPLS Layer Requirements for Inter-carrier Interconnection) and the MIT Futures Communications program for Interprovider QoS (http://cfp.mit.edu/qos/slides.html) to name a few initiatives.

The capability to offer end-to-end quality of service between providers will be pivotal in selling services to multinational enterprise customers. This fact becomes especially true unless one service provider's footprint already meets the multinational enterprise customer's requirementsfor instance, Equant with MPLS-based IP VPN offered in 142 countries. Collaboration among service providers and vendors who develop these technologies is requiredfor example, using IP differentiated class of service to implement a class of service internationally and to ensure that the other provider will honor a class of service designation.

The issue is not so much a technology inhibitor, as it is a requirement to collaborate among providers. However, this requirement for multiprovider collaboration presents competing stresses within service providers, particularly among the global service providers. National and regional providers possess a relatively contained operational and regulatory environment and, therefore, a more containable cost structures. Such providers would benefit greatly by cross-network support from differentiated services that would provide these service providers with greater sales opportunities among multinational enterprise companies.

Global service providers, those with their own infrastructure that spans the globe, might have less to gain by enabling additional "global" service provider competitors except on their own terms. With these dynamics in the background, the questions concerning creating and adopting multiprovider service standards and which providers will drive these standards are still open. Such a standards discussion might be driven by the regional and national providers, therein extending the time for a critical mass of multiprovider services based on differentiated service class constructs. To conclude, we envision more work in this area of multiprovider service standardization. Ultimately, the key word is service. End customers subscribe to services based on their relevancy to the customers' business and life, and not to their underlying technology or delivery system.