What is Driving the Move to MPLS?

By: Albert Subbloie

There are at least two perspectives to the MPLS issue, one coming from the carrier and the other from the MPLS service users. Let me first address the latter.

There are a number of business drivers motivating organizations to be proactive in implementing MPLS: new applications that demand any-to-any connectivity, greater bandwidth, or VoIP — especially as it relates to international calling where the cost per minute is prohibitive — and convergence to name a few. By and large, however, cost efficiencies are the main business driver pushing companies internally to consider MPLS.

On the carrier side, significant investments have been made in their MPLS networks and support systems; to paraphrase a line from one of my favorite baseball movies, “Field of Dreams,” “Now that we’ve built it, let’s hope they come.” Some carriers are attempting to force migration to MPLS through a number of strategies including higher pricing on legacy frame and ATM services and discontinuing or slowing investments in frame or ATM infrastructure. Another strategy involves the publishing of “sunset dates” to create fear, uncertainty, and doubt around whether the carriers will continue to provide frame and ATM services.

The bottom line is that for carriers, like end users, economics is the major motivation in the migration to MPLS services. Put simply, MPLS services are less expensive for the carriers to maintain than legacy Frame and ATM network services. They are also considered to be more “sticky” — meaning because there is a significant investment in the initial migration to MPLS, it’s more difficult to migrate from MPLS than legacy networks and there’s less likelihood that an organization will switch services to another carrier once they’ve made their initial MPLS carrier decision. The carrier stakes are even higher when one considers the “winner take all” strategy that results from some carriers opting not to offer formal network-to-network support. This forces clients not interested in managing a network-to-network interface into considering a single provider solution.

With strong incentives, and perhaps even doubts about continued support for ATM infrastructure support, corporations may feel “compelled” to make the MPLS move. The important point for companies to remember is that the migration to MPLS services should be driven by the corporation’s present agenda and future needs — not the carrier’s.

If a shift to MPLS services seems appropriate, companies should have a clear understanding of their service requirements, including both present needs and future plans and capacity requirements. Is there a need for multiple logical VPNs (segregated VPNs), for instance, to support a corporate network and another to support retail outlets? Do you have the in-house MPLS expertise or will a managed router solution be required? Those needs should be established up front and included in any RFP. Even if you’re migrating with your current provider, make sure you’ve stabilized pricing in your agreement, specifically service guide rates, and base rates, which do change even though your discounts may remain the same. Think futures because you don’t want to be at the mercy of your provider after the MPLS migration and have an agreement that very specifically addresses current sites but requires you to go back to for an additional quote for future additions.

There are, of course, multiple considerations and perspectives to examine. In fact, considerations are many, and for some the choices can be daunting — especially while managing existing services and communications needs. The differences in the way the providers are pricing their MPLS services, along with the complexities associated with managed services, make getting to an apples-to-apples comparison challenging. With that in mind, consider seeking the advice of a reputable organization to provide guidance when formulating and executing an MPLS strategy. Above all, remember, if you’re planning on migrating to MPLS, do it on your own terms with your immediate and future needs well-defined and carefully documented.

Albert Subbloie is President, CEO and Founder of Tangoe, Inc (http://www.tangoe.com), the leading software provider in the TEM space. Recognized as a telecom technology and Internet pioneer, in 1984 he co-founded and served as CEO of Information Management Associates (IMA), guiding its growth to more than $50M in sales. In 1997, he co-founded Buyersedge.com (acquired by Ensera), an Internet company in the field of reverse auction. (Subbloie is credited with a patent for reverse auction theory, the leading Internet shopping site paradigm.) He also founded Freefire (acquired by Teletech Holdings), a web-enabled e-CRM customer interaction software company, and served on the Board of Acsis, Inc., the leading provider of RFID device management technology solutions (sold to Safeguard Scientific). He now serves on the Board of NYC-based Operative Inc. He was also Chairman of the Connecticut Technology Council (CTC) and now serves as a Board member.

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