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