The Hybrid Approach: Why One Size Does Not Fit All

If 2009 could be summarized by one operational catch phrase, it would be “doing more with less.” The economic downturn has been a considerable burden for businesses of all sizes and across all industries.

However, in 2010 it appears that many are beginning to feel less of a pinch and are slowly beginning to recalibrate business and technology priorities in order to not only maintain bottom line stability, but also to help drive growth. Enterprises are increasingly looking at the anticipated expansion of new revenue streams and extension into new markets.

Thus far, 2010 seems to hold the potential to be a period of recovery, but most will still aim to plan cautiously throughout the year with a decreased budget over previous years and operate with a reduced IT staff. From a networking perspective, many of the major challenges facing IT departments remain constant and include:

Improving end-user workforce productivity: In 2009, many businesses felt the impact of hiring freezes and layoffs. In addition, companies have been (and may still be) facing operations and IT budgets that are dramatically reduced or even eliminated completely – resulting in heavy scrutiny around expenditures and ROI. More than ever, IT departments are being challenged to introduce new tools in order to bolster productivity among the workforce – while also working within newly imposed cost constraints.

Global expansion of operations: Whether yours is a company with operations in key business centers worldwide or a company with support sites that are located in developing countries that require connectivity to the core – or both – you have a global footprint. And chances are that footprint is expanding to markets you’ve never operated in before. Your business may be considering geographic expansion for a number of different reasons, e.g., to reduce operational costs or gain a competitive advantage by leveraging low-cost centers in India, China, Russia, Eastern Europe, Africa and South America, etc. – or indeed leverage many of these markets as new sources of revenue. However, complicating matters for this type of expansion includes the need to manage multiple unfamiliar carriers and service providers across all regions and varying levels of connectivity – requiring a range of performance and technology requirements on a site-by-site basis in order to “fit” your network to evolving departmental requirements and key business drivers. In addition, while many service providers can offer Layer 1, Layer 2, and Layer 3 services, it can be difficult to determine which best meets your networking objectives.

Effectively re-engineering core business processes: When it comes to network services, one solution does not fit all. Each site runs various applications and has widely varying bandwidth requirements, and outages in remote areas may not be detected or isolated in a timely manner. And while businesses may realize improved total cost of ownership by entering into short-term, multi-carrier agreements, the long-term consequence can be a complex web of network providers with little interoperability and high levels of vendor relationship maintenance.

To meet these needs while planning within resource constraints – both financial and operational – a viable and proven approach is to deploy a “hybrid” virtual network operator (VNO) strategy, which has emerged from the traditional VNO model where the provider is asset-less and manages only third-party suppliers. There’s quite a bit of confusion within the industry around the term hybrid; as I define it, hybrid can refer to a number of components which are sourced through a combination of the provider’s own assets and its off-net relations:

Access technologies: both wireless (satellite, microwave, WiMax, 3G, etc.) and wireline (xDSL, SONET/SDH, fiber-optic, etc.)
Suppliers: technology suppliers, carrier suppliers, etc.
Services: VoIP, web-based video collaboration, unified communications, etc.

By centralizing all bandwidth and service provider contracts through a single point of management, organizations can better meet the challenges of enterprise networking. Key business and technology demands such as cost, savings, performance and scalability can be addressed. A global service provider that takes a customized approach to designing, building and managing such a network affords the company the most appropriate technologies at every site based on its needs. This could mean resilient, high-capacity, fully-managed and fully-meshed Ethernet services at core sites; leased line, DSL and Ethernet VPLS / MPLS at mid-tier sites; and extensive in-country last mile broadband options for the smallest sites. By doing this, the company is extending its budget – the use of a mixture of technologies and providers means that money is not wasted trying to fit one technical solution into a wide range of site types.

The hybrid approach is also an effective way to meet the ever increasing demand for high-bandwidth applications. Many global enterprises now say that 10Mbps is the typical bandwidth needed at an average site – ideal for Ethernet technology. Global workforce productivity is a big driver behind this. An increasing level of globalization is creating significant amounts of data that needs to be transported across geographic boundaries, and capacity requirements are no longer at a regional or metro level; rather, they are measured on a global basis. A large amount of capacity needs to be created to keep abreast of the explosive growth of global transport of data. Budgets, however, are certainly not being increased.

Businesses require truly global and flexible solutions that provide functionality, price and agility benefits to bring them to the forefront of their respective industries and the ability to scale for future growth and global expansion. It goes without saying that organizations who implement technologies poised to maximize business efficiencies and take advantage of lower operational costs will fare the best in the competitive landscape.

More than ever, CTOs need to take a step back and evaluate their existing network design and available options for managing communication and connectivity within their respective companies. As demand for bandwidth increases, Ethernet and MPLS-based IP VPN will co-exist, and managed classes of service, and end-to-end service level agreements (SLAs) become critical. Global enterprises will realize increasing value from being able to fully control and adjust their bandwidth requirements on demand, and will look to their network management teams to deliver this level of flexibility.

In evaluating network service providers, CTOs can and should demand strong supplier-management and multi-technology capabilities of network providers – from large carriers all the way down to individual in-country operators. As you are exploring the hybrid approach, keep the following points in mind for evaluating network services and solutions vendors to ensure optimum results for your company:

Be sure that the vendor is capable of offering effective network solutions that align with your specific business requirements, including your  industry-specific and growth trajectory needs – without compromise.

Look for a consultative, globally-minded partner with a strong understanding of how certain business aspects impact network design and rapid access to new technologies in all developed and emerging markets to ensure bandwidth and network redundancy needs are met

Ensure that the partner can adjust and modify the technological solution and global bandwidth capabilities to changing business requirements, so you can buy what you need (e.g.: not 45Mbps bandwidth increments, but 1Mbps). They should also allow simple site migration to Ethernet regardless of rising speeds and new global markets.