One of the hallmarks of the New IP is flexibility as telecom service providers realize their customers are expecting their network services to become more flexible in support of cloud services and online apps. And while many network operators are looking to the arrival of virtualization technologies that will make the network itself more flexible, they are developing business models that capitalize on what they can already do today.
Case in point: Orange Business Services' announcement recently that it is adding secure Internet access as part of its Business VPN offer. The move is a response to customer need, says Andrew McFadzen, head of global marketing network solutions at Orange Business Services . (See Orange Creates Business-Class Internet Service.)
While the bread and butter service for Orange in the international market has been its global MPLS-based VPN offering, the company realized that many of its multinational customers also needed direct Internet access for a variety of things, including access to public cloud services but also general Internet access.
"Increasingly, they have become aware that a lot of the traffic is Internet-destined, and it's not business-critical, mission-critical traffic," he tells The New IP. "And whilst some of them say, the easiest thing is to say users can't look at YouTube at work, most are accepting that they need to provide Internet access to their staff."
They can do that by setting up separate local Internet access for each office, but that runs up administrative costs and doesn't guarantee quality or security to the multiple diverse locations many companies have. So Orange is now offering Business VPN Internet as part of its hybrid network strategy. Customers can combine VPN and Internet traffic on the same port, while paying less for the latter.
The customer chooses how much bandwidth it wants as part of its Business VPN service and is guaranteed that mission-critical traffic gets priority in using that bandwidth. Additional bandwidth can be purchased for Internet access, and that traffic can also burst to a higher rate when the Business VPN isn't being completely consumed. So a customer buying a total of 8 Mbit/s of bandwidth, four of which is designated as Business VPN, is guaranteed that bandwidth is always available for mission-critical traffic but is available for use as Internet bandwidth otherwise.
Offering secure bandwidth with quality of service at a lower cost can be viewed as putting revenues for the Business VPN at risk, but McFadzen says traffic for that service is already high and growing, so Orange is looking on this as an opportunity to increase customer satisfaction and pull in new potential business and new customers.
"It gives us an incremental business opportunity -- in some cases the customer maybe wasn't using us as provider of Internet service so it is a new potential income stream," he comments. "By aggregating the traffic requirements for these customers and putting them out through shared gateways, we are achieving economy of scale. And, in addition, we offer cloud-based security at the gateway, which is an additional way of generating revenue for us while at the same time providing quality of service to the customer."
The service, which has been offered on a customized basis and already has about 20 customers, is now available with standard pricing from 15 regional gateways, located in London, Frankfurt, Stockholm, Amsterdam, Hong Kong, Singapore, Mumbai, Sydney, Tokyo, New York, Atlanta, San Francisco, Sao Paulo, Johannesburg and Bahrain. More locations will be added based on customer demand, McFadzen says.
The networked gateways provide a backup plan -- if one fails, traffic is routed to another -- but a geolocalization feature also notes the origin of the traffic and keeps as much of it local as possible. In addition, it insures that users get Internet traffic tailored to their needs, such as in-country versions of Google.
"The 15 gateways we have selected are located in data centers where we have access to Tier 1 ISPs," he says. "Orange itself provides an open transit network as a Tier 1 ISP and we are peered with other Tier 1 providers so the idea is that the end user gets into a quality level of the Internet."
Orange already offers a VPN Gallery service, which allows its VPN customers to have dedicated access into its own data centers and into third-party facilities such as Equinix Inc. (Nasdaq: EQIX), where it has installed a special Gallery router that enables secured direct access to a growing portfolio of Internet-based applications such Microsoft Office 365 and salesforce.com.
McFadzen expects more changes ahead as Orange tries to stay in touch with the shifting network needs of its multinational business customers. Interestingly, one service he doesn't anticipate adding soon is a true bandwidth-on-demand option, which is something Orange has inside France but not in its multinational portfolio.
The reason is simple, he says. Multinational customers aren't clamoring for a service that changes their monthly bills from a set amount to a variable amount.
"We aren't seeing a lot of demand for that so it's not on our near-term road map," McFadzen says.
— Carol Wilson, Editor-at-Large, Light Reading