Next-Gen WAN: Build or Buy?

Enterprises need to consider a number of factors, including security requirements, when choosing between an in-house model or managed network service for their future WAN connectivity needs.

Mitchell Simcoe

May 28, 2014

5 Min Read
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Enterprises today need WAN connectivity that can support their growing cloud and virtualization efforts. There are two main business models to choose from: A build-your-own network model based on dark fiber and the use of carrier-grade packet-optical technology, or a managed private network service that is outsourced to a service provider.

To decide which option to pursue, enterprises must carefully analyze the two deployment models against a well-defined list of capabilities that can best address their company’s long-term goals and needs. They also need to establish clear objectives for how to allocate operational and capital expenses for these initiatives going forward. In the final analysis, this may not be an either/or decision as many organizations have both models running concurrently. Here are some key factors to consider when weighing your options:

The network has to be flexible. The traditional datacenter, defined by its hardware and devices, has transformed into a cloud-based, on-demand IT infrastructure. In the past, WAN connections were static, but with cloud computing, they become much more dynamic. In today's cloud era, when enterprise bandwidth changes, WAN end points change locations. This accelerates the need for flexibility as enterprises expand their networks dynamically to support new customers and growing operations.

Speed to deployment is critical. Business demands are changing, and infrastructure must be able to adapt quickly to meet changing conditions. For those seeking to build, there are considerations that must be taken into account, for example: How quickly can internal IT resources ramp-up the required skill sets to manage a private packet-optical network? And are shelves, ports, wavelengths, or fiber available to quickly add new capacity? If the answer to these questions is no, leveraging a managed service provider might be the appropriate alternative -- just find out how quickly the provider can adjust the SLA to accommodate change.

Growth requirements. For constant, long-term growth, building a network is appealing. First,identify mission-critical applications, their required connectivity and their corresponding protocols, bandwidth, and latency requirements. Then, consider their redundancy and disaster recovery conditions. If growth is uncertain, a managed service might be more appealing because it provides the flexibility to prevent lock-in with a specific vendor or solution, and its packet-optical infrastructure can evolve, avoiding technology obsolescence. Also, managed service contracts typically last one to five years, allowing enterprises to change solutions based on new requirements.

Core IT competencies. As networks become increasingly complex, should IT resources be focused on meeting customer needs, or developing skills sets to handle internal projects such as a private network? Each enterprise must determine how much to invest in IT staff. For enterprises with sufficient resources, a build model will require IT skills that specifically target the needs of building and maintaining a core network WAN infrastructure, while the buy model frees up resources since most infrastructure management is handled by the service provider.

Datacenter needs vary. Enterprises must have the ability to support a multi-datacenter environment and foster interaction with the cloud. Their communications infrastructures must be cost-effective for smaller, regional data centers with the ability to scale during rapid growth or reductions, and be able to support new applications while offering connectivity to external partners, customers, and suppliers via the cloud. Having confidence in the long-term location of datacenters is a necessity when implementing a private network. Enterprises with a heavier reliance on multi-tenant datacenters and cloud infrastructure will want a more flexible managed service network that can quickly change as the datacenter market changes.

Future-proof investments. Today’s infrastructure should meet tomorrow’s needs.Packet-optical technology capabilities are accelerating at a rapid rate. While 10 Gigabit Ethernet (GbE) in the LAN is migrating into the WAN, core networking is moving to 100GbE. A private network enables enterprises to quickly implement the latest technology, while service providers generally take longer to adopt new technology. When doing it alone, managing the evolution of software-defined networking (SDN) -- a key element offering investment and flexibility protection -- must also be taken into account.

Upgrade planning. Does the IT department have the time and resources to deploy the latest functionality from vendors in their networks? With a built-in network, the enterprise may have spare ports or boards available that can be used for this purpose, while a managed service provider might require a whole new contract when it comes time to upgrade.

Security requirements. If security is of paramount importance for an enterprise IT network, a private network over a dedicated infrastructure may be the only choice to ensure the highest level of network security. For enterprises that do not have the staff and resources available to focus on security, a managed service provider should be considered, preferably one that maintains an optical virtual private network (O-VPN model) to provide necessary customer segregation and security. A third "hybrid" option exists in which the enterprise owns the equipment, while the fiber and the management are owned by the service provider.

Who controls the network? When building a network, the enterprise has total control and can purchase and develop features and capabilities as needs arise, but this also requires a dedicated staff to handle the increased complexity of communications architectures. Managed service providers, on the other hand, rely on customer portals with graphical management interfaces that allow IT/datacenter managers to view SLA performance in real time and quickly provision new services on their network. The downside is that customers may not have the ability to influence how design decisions are carried out.

Capex and opex analysis. Before making a build or buy decision, enterprises need to have a full understanding of their financial status. Are they projecting significant growth for the long term and have the cash for capex? Is there some uncertainty regarding growth over time?  Those in the first situation may lean towards a private network build, which could provide financial benefits over the long haul, but does necessitate having the expertise to manage the network. Those with capex limitations might instead lease a network through a managed service provider and pay a regular monthly expense. Though this may cost more in the long run, there are significant savings in opex by outsourcing the management and skills to a service provider vs. taking it on in-house.

About the Author(s)

Mitchell Simcoe

Mitch SimcoeIndustry Marketing

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