Convergence and cloud challenge traditional ways of working

Today’s enterprise applications span beyond the traditional voice and data networks. They include IP voice, unified communications, and cloud-based services and need to connect distributed enterprise locations, remote employee connectivity, disaster recovery planning and much more. The traditional circuit switched private line or SONET networks – while offering the highest level of reliability – do not offer the best platform for convergence or support enterprises’ various connectivity needs.

Enterprises are increasingly adopting MPLS (multiprotocol label switching) and VPNs (virtual private networks)” to converge voice, video and data traffic as it enables them to improve operational efficiency and better manage operational expenditure (OPEX) by consolidating their applications on a single network. Increased penetration of MPLS/IP VPNs is also driving the attach rate of voice over Internet protocol (VOIP) and session initiation protocol (SIP) trunking among enterprises.

Ethernet is fast becoming a dominant network service in enterprise wide area network (WAN) connectivity.  It offers a cost-effective, scalable and reliable bandwidth speed that is critical for efficient use of enterprises applications. Gone are the days when an enterprise looking at migrating to bandwidth beyond 1.5 Mbps or T1 speed has to look at multiple T1s or procure the next available option. Ethernet service can seamlessly scale from 1 Mbps to 10 Gbps or more, and runs on switched network architecture that enables service providers to offer cost-effective bandwidth as compared to dedicated TDM circuits.

Finally, no discussion on enterprise application trends is complete without the mention of cloud computing. The emergence of cloud-based services is a key driver for both MPLS and Carrier Ethernet.  Cloud services offer an affordable and flexible alternative for enterprises to implement applications using a virtualized model hosted by a third party, instead of buying, developing and maintaining dedicated infrastructure. A cloud model means significant CAPEX saving (no more enterprise-owned dedicated servers) for enterprises, and the flexibility to scale as they grow. As cloud offers mature, key applications such as ERP and CRM are being entrusted to the cloud. As mission-critical applications and processes migrate to cloud, the importance of reliability and security of the networks used to build clouds and access these services is increasing. Both MPLS and Carrier Ethernet can play a key role in enabling and accessing cloud-based services.

While MPLS is driving adoption of bundled service offerings – VoIP, UC, security services and managed services, the emergence of cloud computing is influencing enterprises to distribute their applications among private, private data centers, public clouds, private hosted clouds, and hybrid clouds.  Global carriers with an expansive global network footprint and a focus on growing markets – India, China, South Africa, etc. – are in a unique position to tap into the market potential for both enterprise solutions and connectivity needs. In short, the rise of Ethernet, MPLS VPNs and cloud computing has created a “perfect storm” situation for CSPs in the market.