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Special Feature
March/April 2001

 

BLECs Bear The Burden Of Service Level Verification

BY JAMIE WARTER

Virtually every home and business needs to be wired these days. From high-speed Internet access to Voice-over-IP (VoIP) services, everyone needs and wants to sign up for advanced network services. Homes and businesses that share a building have an alternative to the traditional service providers -- building local exchange carriers (BLECs). BLECs contract with a landlord to wire a building and provide data, telephone, and entertainment services to all the tenants for a more cost-effective operation. They take care of everything, and send one convenient bill to residents and small business owners who welcome the help with a technology that threatens to overwhelm their smaller operations.

Commercial buildings hold most of a BLEC's hope for growing revenue. While small-to-medium-sized businesses are demanding many new IP services, the traditional data communications providers have primarily focused on serving large corporations. BLECs are a good choice for these smaller corporations because they focus intently on individual facilities, unlike large regional service providers. However, with a market limited by the size of the building, BLECs need to up-sell advanced Internet-based services to continue their revenue growth. To accomplish this, BLECs must earn the trust and confidence of their customers to get them to make the leap to the high-performance services that can really make their investments in infrastructure pay off. In the past, this trust hasn't come easily because the service level agreements (SLAs) guaranteeing quality and performance made between the BLEC and the tenant set expectations, which were really just empty promises since neither party had any way of verifying the performance of the actual services provided.

Emerging SLA verification systems now allow BLECs to offer their tenants SLAs backed by real-time service quality verification. For example, a new class of hardware products, called verifiers, constantly monitor performance, check it against what was promised in the SLA, and report results to both the BLEC and tenants. These enforceable SLAs ease tenants' minds about uptime, jitter, speed, and other critical service qualities. Building trust with tenants will allow BLECs to sell more advanced Internet-based services, thereby unlocking the revenue potential of the high-performance infrastructures they've created.

THE BLEC IN DETAIL
BLECs buy the rights to wire an entire office building and provide cable, phone, basic data, and advanced Internet services to all its tenants. It's a captive market, but a limited one all the same. A BLEC provides basic network connectivity and advanced IP services to these multi-tenant units (MTUs), ranging from skyscrapers to industrial parks to apartment complexes, which number about 118,000 in the US alone. Usually this entails providing Internet and phone services to large residential buildings, or small and medium-sized businesses occupying a floor or suite in an office building. In addition to broadband access, they can offer services such as Web hosting, applications hosting, unified messaging, IP telephony, data storage, virtual private networks, outsourced applications, and tailored content services. The combined market for residential and commercial BLEC services will double annually and reach $1.4 billion by 2003, according to the Yankee Group (www.yankeegroup.com).

The commercial portion of the BLEC market is prime for growth in the delivery of increasingly advanced applications. The Yankee Group estimates the value-added services market for BLECs will jump from $13 million now to $982 million by 2003. This growth will come from enhanced services such as IP-VPNs, co-location, Web/applications hosting, security/firewall services, and video conferencing, among others. Managed services, such as outsourced IT and help desks, managed desktops, Web site design, network and legacy systems integration, and online billing, will be the BLEC's next step.

BLECs have made major investments in building out their high-performance networking infrastructures, upon which their new IP services and applications run. However, the migration of customers from traditional telecom and datacom technologies to innovative IP-based solutions is slow because tenants are uncertain about these services' quality and predictability for the critical functions in their business. BLECs are conveniently located right in the building, and their infrastructures are already installed. For basic services, BLECs may have a cost advantage because they provide service to many tenants in many buildings. They buy in volume and may use some of that cost savings to compete.

SERVICE LEVEL VERIFICATION
But the BLECs are often new entrants without strong brand name recognition. Typically, they're competing against better-known incumbents, such as AT&T (www.att.com), WorldCom (www.wcom.com), or Sprint (www.sprint.com). Tenants are often unfamiliar with the BLEC's capabilities and quality. Winning customers and migrating their critical applications to a BLEC's IP network requires a very solid guarantee to the tenant who might not yet have confidence in the BLEC. That's where service level verification comes in.

BLECs have to offer significant value through either higher performance for the same price, or the same basic services for a lower price in order to win business from an incumbent provider. Actively monitoring service performance and verifying SLAs allows BLECs to compete on quality as well as cost. The BLEC can use a high-performance, real-time service level verification system to prove its tenants are actually getting the services, quality, and performance they're paying for.

Service level verification systems are easy to deploy, cost effective, and secure, allowing BLECs to react quickly to new business opportunities. Hardware verifiers mark the edge of a service -- creating a demarcation point where the BLEC's network ends and the tenant's begins -- that eliminates the blur that has prevented accurate Internet performance measurement. Verifiers deliver information about the service's performance from the tenant's point of view in real time. This eliminates the finger pointing that often weakens the relationship between a service provider and a customer when no one can really identify where a problem is, let alone solve it.

Verifiers and the verification systems integrate easily into a BLEC's infrastructure for quick service to new customers. They can even seamlessly integrate into the BLEC's customer service portal for reporting and billing. The service level verifier sits at the edge of the network at each office complex within the building so the BLEC can show each tenant the performance of the services they are receiving as the services hit the tenant's network. If the tenant is experiencing a problem, it will be easy to determine if it is in the tenant's network or in the BLEC's.

BUILDING WINNING RELATIONSHIPS
When a tenant moves into a building with a service level verification system, they sign an SLA with a BLEC. When their BLEC uses verifiers to monitor SLAs, they can immediately begin receiving information on the performance of the services they are buying from the BLEC. Right away, and all along the way, they can see what they're getting and how it compares to the expectations defined in their SLA. Real-time SLA data gives BLECs the level of accountability and credibility they need to successfully compete with larger regional service providers on quality. In the end, service level verification is a classic win-win situation for BLECs and their customers. The BLECs can build trusting relationships with their tenants, which help them sell the high-performance IP services that drive revenue and profitability. And tenants get the reassurances that they are receiving the utmost quality and performance from the services they paid for.

Jamie Warter is vice president of marketing and business development at Brix Networks, of Chelmsford, MA. He can be reached at jwarter@brixnet.com. Brix offers carrier-class products and services that provide pervasive and proactive Service Level Agreement (SLA) verification. For more information, visit the company's Web site at www.brixnet.com.

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