Building the Cost Effective WAN Stories From The Field

Irwin Lazar, Vice President Communications Research Nemertes Research Irwin.lazar@nemertes.com

Agenda
About Nemertes WAN Technology Overview & Adoption Trends The Role of Wireless Recommendations

Introductions: About Nemertes

Analyze business value of emerging technologies Advise Fortune 100-2,000 businesses on critical IT strategies Benchmark reality 2,500+ IT executives share strategies, costs, vendor satisfaction Analysts have 17-30 years experience, including operational Founded 2002

WAN Technology Overview & Adoption Trends

Distributed Enterprise: Overview

89%
More virtual workers

Streamlined Communications

Managed Services

MPLS & Ethernet

6.8%

More branch offices

Optimization

(Solid network performance is vital)

57%
More centralized apps & data

18%
Branches with IT personnel

44%
Flat IT budgets
More bandwidth demands

BandwidthBandwidth Growth Growth Unstoppable

120%

100%

99% 84% 72%

80%

60%

50%
40%

20%

0%

2006

2007 2008 2009 Corporate bandwidth growth, year over year

Top Bandwidth Drivers

Top Bandwidth Drivers
Video/telepresence New collaborative apps New enterprise apps More multimedia Web apps Centralized apps

36%

29%

27%

25%

23%

IP telephony
0% 5% 10%

18%
15% 20% 25% 30% 35% 40%

The Year of Video? Finally?

IP Video Conferencing
Desktop 60.0% 50.0% 51.0% 40.0% 30.0% 20.0% 10.0% 0.0% 38.4% 34.3% 24.5% 22.5% 27.3% 24.5% 23.7% 53.8% Room Telepresence

Nemertes Research: Unified Communications and Collaboration 2008

Using

Evaluating

No Plans

Unified Communications
VoIP IP Video
E-mail
IP audio conferencing Web conferencing

IP CC
Social Computing

User Interfaces
Web portals Dashboard Office productivity apps Handsets

Common Protocols (SIP, SIMPLE, XMPP)

Presence

Telepresence IM

Desktop video UM

Fixed Mobile Convergence Communications-Enabled Business Process Management, Directory, Security

Streamlining Communications & Applications

Location doesnt matter
Users want applications, access to data regardless of location

Trend toward centralization of apps, data

Ease of management key driver

All-in-one devices gaining momentum

48% of organizations use/want to use (see next slide) Two types of devices Routing/switching/security/wireless/IPT/compression App acceleration/WAFS/DHCP/DNS/Print & file servers

More attention toward robust WAN & optimization

Why a Robust WAN? Cost vs. Tradeoff

Insufficient bandwidth Multiple WANs

Results
Performance Problems Decreased productivity Too long to troubleshoot Fiscal irresponsibility No way to measure success/failure

Weak WAN

No QOS/Optimization Lack of monitoring No benchmarking performed No annual contract review No standards for branch

Technology Architecture & Evolution

HQ Branch

Ethernet
T1/T3, wireless, satellite

Redundant, diverse T3, OC-3 Ethernet, frame, or ATM

MPLS
(De facto WAN Standard)

Teleworker

Virtual

Broadband access

Wireless, satellite

WiFi, WiMax

Typical Deployment Timeline

VoIP/UC WLAN Branch standardization All-in-One Branch/New & upgrades Optimization MPLS, Ethernet, VPLS deployment WLAN +

Switch/router upgrade Data-center consolidation

12 months
Planning

24 months
Carrier RFP & negotiations

36 months

48 months
Mobile Extensions

60+ months

Corporate Buy-in Pre-deployment benchmarking

Validate Business Case

Upgrades

Training, Management, Reporting, Security

MPLS

Urgent: Act Now Not a matter of if, but when

(90%+ using/evaluating)

74% using/planning

Justification: MPLS
Key Benefits
Cost savings
Range is 10%-40%

Why Not?
Global coverage from single carrier not truly available Costs associated with upgrade (network equipment, installation, training) No application drivers
Internet VPN still cheaper in some cases

Ability to integrate multiple traffic types on one network Any-to-any ability/DR COS: Better manage capacity
50% dont use COS 23% use 4 or more classes

Less overhead than ATM/Frame Solid managed services available

MPLS Deployment Justification

41% Any-to-Any Architecture

41% QOS Capabilities

100% 90% 80%

MPLS Adoption Trends

74% 70% 60%

18% Cost

50% 40% 30% 20% 2004 24% 2006 2008 42%

Ethernet & VPLS

Better Act Now Urgent: service; happier agents Specific Needs

62% using/planning

Justification: Ethernet & VPLS

Key Benefits
Emerging as next-generation WAN technology Lower per MB costs vs. MPLS Greater bandwidth & flexibility Better customer satisfaction vs. MPLS
79% extremely satisfied, compared to 67% with MPLS

Why Not?
Cant get it!

Ethernet Deployment Justification

Ethernet Adoption

54%

53%
52% 50% 48% 46% 44% 42% 40%

46%

46%

2006

2007

2008

SIP Trunking

Short-Term Plans

33% + using/planning

Justification: SIP Trunking

Key Benefits
Reduced costs
PSTN: 20%-60% savings, depending on current, future network No need to buy gateways

Why Not?
Cant get it! Security concerns
IP connection opened to PBX; need SIP firewall

Ability to share trunks Virtual Number Services

PBX doesnt support SIP or requires costly upgrade

Optimization

Urgent: Act Now

65% using/planning

Justification: Optimization
Key Benefits
Delay bandwidth upgrades
Cost savings

Why Not?
Up-front hardware cost
(Usually offset by operational costs in <1 year)

Get bandwidth utilization data

Useful monitoring tool

Better manage traffic flows Improve application, network performance Improve data transfer (backup, access to central files)

No pressing bandwidth growth

The Mobilized Workforce Is Here!

More than half of companies have or are planning mobility strategy. Average anticipated 12-month growth in number of mobile devices is 421% (median = 100%)
Of those with discrete budget, currently spending 4%-4.5% of overall IT budget on wireless/mobility

Enterprise user populations are shifting from specialpurpose (sales, logistics, onsite repair) to general Application demand is increasing dramatically Device requirements are more complex (multimode, security, etc.)

Managed Services Adoption

Managed Services Adoption
70%

60%

63%

50%

46%
40%

30%

27%
20%

10%

0%

2006

2007

2008

Types of Managed Services

Types of Managed Services in Use at the Branch
Managed routers/network

82.0%

End User/desktop support

35.9%

IP Telephony Management

33.3%

Security

20.5%

Disaster Recovery

15.4%

Break/fix/truck rolls

11.1%

100% Outsourcing

5.1%
10.0% 20.0% 30.0% 40.0% 50.0% 60.0% 70.0% 80.0% 90.0%

0.0%

Building A Strong WAN: Carrier Relationships

Consider new WAN technologies

Select carrier with a vision!

Negotiate stronger SLAs

MPLS VPLS Metro Ethernet Optical 3G/4G wireless

Mobility integration Hosted collaborative apps Professional services Unified communications Managed services Management portals Policy-based prioritization

MTTR Uptime Packet loss App-specific Stringent penalties

Bottom Lines and Recommendations

Consider key emerging WAN technologies. Standardize products, capabilities at your distributed enterprise. Assess the value of managed services. Plan for expansion! The keyword here is more applications, bandwidth requirements, branch-office sites, expectations from users, etc. Leverage wirelessfixed and mobile. Follow a formal procurement/negotiations process (no matter how small you are).

Thank You
Questions? research@nemertes.com

Robin Gareiss Executive Vice President & Sr. Founding Partner www.nemertes.com