Enterprise Broadband: Beyond Bandwidth Play

The decrease in broadband costs has helped in fueling the demand
for cost-effective communication solutions based on broadband. With the
enterprises today demanding value added offerings on top of pure bandwidth play,
the enterprise broadband market has shifted from pure bandwidth play to services
and solutions. Today, all major service providers are already offering
applications such as MPLS, IP VPN, IP Telephony, IP conferencing, security,
managed services, ASP services, bandwidth on demand, co-location, hosting
services, etc. Thereby, providing the vendors and service providers a whole new
avenue for incremental revenues. As vendors gear up with newer service
offerings, it's the right time for enterprises to eye enhanced broadband
applications.

Over the next 1-2 years, as the market becomes more competitive,
CIOs will have a much broader range of offerings to choose from and at cost
effective price points. However, last mile delivery of services is a concern
area that is being taken care of, but still exists to some extent. In addition
to this, the packaging of services, consistency in quality, adherence to SLAs
and price points are going to be some of the key determinants shaping up the
enterprise broadband solutions market in the coming year.

Abundant Applications

A significant driver in the growth of broadband solutions and services is
the growing demand for bandwidth intensive applications including inter-office
business applications and converged solutions. The services vertical is emerging
as the biggest market of broadband applications, followed by manufacturing and
FMCG.

According to Atul Bindal, joint president, Broadband &
Telephone Services, Bharti Airtel, the rise in bandwidth and connectivity
requirements is today being generated by an increasing number of organizations
adopting Enterprise-wide Applications, WAN or inventory management besides using
bandwidth for e-mail, Internet access and inter-office communication. "In
the coming days we will see an increase in the convergence of voice, data and
video services with a rapid growth in network traffic," he adds. Overall,
triple play is emerging as a big catalyst in the growth of enterprise broadband
applications.

The availability of enhanced and a wider range of broadband
solutions in the market is further catalyzing the growth of broadband
applications in the enterprise. Hence, the growth in each is driving and pushing
the other.

There are a host of next level of broadband applications in
enterprises that are now emerging on the scene in addition to those that are
already in the process of becoming mainstream. According to PK Saji, VP,
Technology, Sify, voice and video are the most used high-bandwidth broadband
applications which are real-time in nature. Bandwidth requirements are growing
mostly because of such applications. Some top of the list enterprise broadband
applications include video conferencing, video calling, netmeeting, VoIP,
virtual classroom and e-learning applications for corporate training, access to
content and knowledge base on demand in the corporate, etc.

Going forward, the enterprises are expected to deploy more IP
based bandwidth intensive applications like Unified Communications and
TelePresence. According to Shrikant Shitole, business development manager,
Service Provider, Cisco Systems-India & SAARC, over the last few years,
enterprises have been deploying IP based applications to drive greater
productivity and profitability. As a first step, they were increasingly using IP
based applications such as IP VPN and IP Telephony.

According to Bindal, in the coming days, VoIP and video
conferencing applications will emerge as the key applications driving enterprise
level broadband. "Enterprises today are moving towards communication
technologies like VoIP, videoconferencing and webconferencing, instant
messaging, thereby saving costs involved in travel and enhancing
productivity," he adds. With the growth in conferencing and collaboration
kind of requirements, there will be a further spurt in the demand for the video-
and webconferencing kind of applications.

Apart from these applications, the basic enterprise applications
are also a significant growth engine for broadband solutions. According to
Sourabh Kaushal, industry manager, ICT Practice, Frost & Sullivan, India,
enterprises are moving beyond ERP application and implementing to a host of
other applications like CRM, business intelligence, SCM, Inventory management,
intranets, etc which will need access, thereby warranting the need for high
bandwidth. Besides, organizations are increasingly moving to a centralized
architecture with the various offices connecting to applications residing in a
central database. This, again, is warranting the need for high bandwidth for
connecting.

Enterprise customers have also moved into extranet VPN solutions
connecting sales partners and agents into their VPN. Some more enterprise
applications requiring higher bandwidth, span across the spectrum ranging from
sales force productivity tools, order capture and status, live stock updates and
customer service. Organizations have adopted these in varying degrees based on
their focus and impact.

Next Gen Broadband

According to Arun Gupta, director, P-GIS, BRM-SCANZ, Philips Electronics
India, more and more enterprises will look at rich media applications with the
increase in broadband availability. Thus, basic applications will now change to
full scope applications. "The shift will be dramatic in the case of mobile
broadband as compared to fixed broadband. The Indian market has adopted
mobile-based applications with velocity that surpass many developed markets. The
simple example has been the data cards on the laptop," he adds.

Today, all major service providers are also deploying next
generation networks to deliver more enhanced and converged broadband
applications in the future. With the increase in availability of broadband a
number of new initiatives will become reality across industry verticals and a
few processes irrespective of the industry segment. For instance, order
fulfillment across industries can be expedited with the help of increased
broadband penetration.

Some key emerging areas of broadband applications include
advertising by enterprises at Point-of-Sale locations like ATM and retail
outlets, particularly in BFSI and retail; for e-Governance in the government
sector and video broadcast to off-sites like billboards, by the media sector.

Solutions Trends

According to Rajiv Gerela, GM, Technology at Wipro BPO, as one would note
from the various types of applications that are emerging, the demand is not just
for pure bandwidth but for many solutions around the way such applications are
going to be set up and offered. "Pure bandwidth will play a big role and up
ahead may become a bottleneck as well in deployment of such services. But for
now, with decreasing bandwidth costs, the market and innovators are all at play
trying to build their turf," he explains.

With decreasing bandwidth costs and ARPUs, the service providers
themselves are eyeing more high value and high margin markets. As a result, they
are also more than eager to serve the growing demand for offerings besides pure
bandwidth. Furthermore, they are now trying to generate new service markets and
create the demand for them.

While VoIP, videoconferencing and webconferencing are emerging
solutions, enterprises are now increasingly looking at customized solutions that
address their communication requirements, other than pure bandwidth. Bindal
feels that the need of the hour is customized end-to-end communication solutions
that address the unique requirements of different industries and telecom service
providers and will increasingly offer integrated solutions in the coming days.
"The difference between yesterday and tomorrow would be creation of robust,
scalable fat pipe, which can flawlessly take care of the hosted services coupled
with excellent customer support from service providers," he adds.

There is already a shift happening from conventional point to
point leased lines towards MPLS networks and managed services as these offer
better control and network efficiency to the enterprise. Enterprise networks are
moving away from traditional TDM based private CUG network to MPLS based IP VPN
CUG network. According to Saji, MPLS solutions are proven to be secure and
scalable to a large extent. Any enterprise network can grow by just patching up
their new central/regional/branch offices and agents to an MPLS SP cloud with a
local loop.

Over a period of time, managed services will also gain momentum
over basic connectivity. Many service providers have already made the
transition. "With telecom service providers expanding their basket of
services, I expect that end-to-end management of networks and shared data center
services, including disaster recovery options, will become mainstream
offerings," says Gupta.

The basic difference today is the service levels offered as
compared to the past when there was no focus on SLAs. This has provided the
impetus towards creating and deploying mission critical applications over the
distributed enterprise, which was earlier limited by the lack of quality
connectivity. It's no longer a risky proposition to deploy applications using
connectivity solutions in multiple ways including and not limited by the
Internet, mobile phones, and PDAs.

SME, 'On Demand'

Today a majority of mid-sized companies are investing heavily in
connectivity resulting in the demand for broadband connectivity from SMEs
growing rapidly. The need for setting up enterprise wide applications as well as
the adoption of other enterprise applications is the key for the rising need for
bandwidth. One of the key applications is logging orders for immediate
fulfillment thereby improving the supply chain mechanics and increasing
profitability for the small enterprise by rolling the cash quicker.
Additionally, the SME segment is also going to extensively use broadband for
email, Internet access and inter-office communication. As a result, today, the
SME market is on the radar of most of the broadband solutions and service
providers. According to Gerela, there will be a host of applications in this
space and a whole lot of demand around bandwidth, web hosting, etc which will
see an increase in the SME segment.

According to Shitole, at the core of this technology adoption by
SMEs is the need for faster, more reliable communication such as high speed
Internet access. Broadband is an effective platform for delivery of services and
applications. SMEs can leverage broadband connectivity to run data intensive
applications like VoIP, etc. These are particularly attractive to SMEs owing to
the benefits that accrue from such a technology, in terms of cost savings and
enhanced productivity. "Broadband also enables SMEs to provide and
implement improved customer service capabilities in the form of new suite of
hosted applications/services depending on their core area of business. These
technologies help companies improve customer responsiveness, reduce
communication costs, realizing a measurable return on the investment,"
highlights Shitole.

The rise in demand from the SME brigade is further fuelling the
trend towards 'bandwidth on demand' services, though the trend is permeating
into large enterprises as well. As Bindal points out, customers, especially SME
customers would prefer not to spend on technology but would prefer services
available 'on-demand' through 'hosted services'. Market is moving
towards 'pay per use' scenario and moving away from incurring individual
capex on technology by the customers. The demand for hosted services is greater
in the SMEs owing to the cost effectiveness factor. "SME adoption has been
cautious in the past. This is changing with a multitude of service providers
offering hosted solutions with low cost of getting started," says Gupta.
Shitole touts SME as the fastest growing segment for managed services adoption
in India.

However, Saji opines that today SMEs are happy with the retail
broadband solutions though there are a number of security issues that have to be
taken care of. "Otherwise SMEs prefer using wireless broadband solutions
than wired ones like Metro Ethernet," he adds.

Wireless Broadband, in the Loop

A keen area of interest for vendors, service providers and enterprises alike
is the wireless broadband space. In a geographically spread out country like
India, wireless technology is the fastest and most cost effective way of
delivering broadband especially in the last mile. Thereby enabling wider
broadband penetration in the country. In fact, Bindal touts WiMax as the next
big thing in broadband services. Wireless technologies like WiMax are much
cheaper as there is no digging, spectrum is available on revenue share model,
and utilization can be maintained at high levels. It also has a higher reach as
it moves beyond terrain barriers, he explains. In terms of benefits from an
enterprise perspective, Gupta explains that since WiMax offers benefits similar
to wired with the constraint of location removed, thus, what a person could
experience in office will now be possible while traveling too. This should
improve productivity and drive enterprise value. The segmentation of
applications by carrier type will no longer be valid and deployment will be
seamless irrespective of connectivity type.

However, constraints still remain. The biggest challenge for
WiMax in India will be the challenges on standard spectrum availability, points
out Saji. "Globally 3.5 Ghz band is identified for WiMax which is not yet
available and hence we would have a risk of loosing the price advantage. Hence,
WiMax based wireless solutions may take time to become a solution of choice for
price sensitive markets," he explains. Gerela concurs as he adds that WiMax
will still take more time.

WiMAX, however, will be only one of the several next generation
all-IP end-to-end mobile wireless technologies that will see broad deployment
going forward. The others include the UMTS LTE and the long-term evolution of
CDMA EV-DO. WiMAX is probably two years ahead of the alternatives, but we expect
3GPP (3rd Generation Partners Project), and 3GPP2 to work hard to close the gap,
says Shitole.

At the end of the day, in the debate between wired Vs wireless
broadband, it won't be a case of either or but a mix. All Indian service
providers have both wireless and wireless networks to deliver broadband. The
clincher finally will be the solutions and services that the vendors and service
providers are ready to deliver with an eye on more stringent SLAs than ever
before.

Shipra Arora


shipraa@cybermedia.co.in