First introduced in the 1980s, private lines dedicated, protocol-independent, copper-based high-speed connections between business locations are an old-school approach to wide-area networking. But while much has been made of the technologys fresh-faced competitors notably, Ethernet, frame relay and MPLS VPNs private lines still rule, providing plenty of opportunity for channel partners.
Private-line service in the United States is a $12 billion market and holding steady through 2008, according to Vertical Systems Group Inc. By comparison, U.S. Ethernet services will total just $1.4 billion by 2008, albeit at a 30 percent compound annual growth rate.
Private line still appeals to a broad customer base, says Heather Selbert, managing director of operations at American Telesis Inc., which offers circuit speeds of DS0, 56K, DS1, DS3 and OCx. It also has a managed service solution so customers can monitor equipment as well as circuits. She says that a broad range of industries, including health care providers, banks and financial institutions, government, schools and universities, broadcasters, trucking companies and package carriers, retailers, architects and engineers, attorneys and communication companies, still turn to private lines because they require security, speed, strong SLAs and customer service. Private lines offer businesses clear-channel circuits with guaranteed bandwidth for mission-critical applications ranging from bulk data transfer and disaster recovery to distance learning, engineering and video conferencing. They need a network that is available 24 hours a day. They are passing sensitive data over their network and that data is typically sensitive to any latency, she explains.
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As a mature technology, private lines are tested and easily understood, a good thing for agents and customers alike. Factors such as inherent industry support, high capacity and high network availability will continue to drive customers to this familiar technology, says Elizabeth Vanneste, senior vice president of sales and marketing at Progress Telecom LLC, which offers privateline bandwidths of DS1, E1, DS3, OC3 to OC192, and STM1 to STM64. Private lines can easily fit in to customized solutions that agents may be compiling, with interoperability between vendors being a virtual guarantee.
It may be a $12 billion market, but private lines show revenue growth of less than 1 percent. However, last year there was a 10 percent jump in total bandwidth. That indicates that most of the market movement is in upgrades. The amount of bandwidth customers need is increasing all the time as more applications are deployed, like fullmotion video. There are simply more bits flying around out there, says Erin Dunne, director of research services at Vertical Systems Group. Speed upgrades, from 56K or fractional T1s, represent an excellent opportunity, especially since its just a billing change for the customer; no new equipment [is] required.
Ethernet will be a disruptive technology, Dunne says, but its still no threat to private lines any time soon, especially in the SMB space. Ethernet is a 10 meg [megabit per second] and above option, and thats overkill for many folks.
Selbert says the observation bears out. While we have many customers talking to us about changing to MPLS solutions or Ethernet solutions, we do not see those conversions coming in as much as we see the upgrades in private-line circuit speeds, she notes. Customers are upgrading their equipment so that they can converge their data and their intra-office voice applications over larger bandwidth, but they are often staying with private-line [services] to do this.
For some customers, private lines fit into a WAN solution as one of many technologies deployed. The need for greater bandwidth by the customer is undeniable and will only continue to increase, says Selbert. Some of those needs will be met by the new technologies and some will continue to be met by private line.
Most metro Ethernet offerings still require fiber into the customer site, for example. This limits its availability to roughly 20 percent of customers nationwide, she says. Until Ethernet delivery over copper becomes readily available, that fiber requirement limits the availability of those large Ethernet pipes to metropolitan customers. This forces customers to look at multiple options to service their geographically diverse sites.
There also is innovation in the private-line space to meet changing customer needs. [We] have noticed an increase in the requirements for customized solutions, including multiple location connectivity and circuit portability, says Vanneste. Progress Telecom offers a volume-based solution, dubbed FlexBand, which allows for customized configurations. Earlier this year, the carrier introduced the Protocol Conversion Service that transforms an E1 to two T1s.
While traditional private lines are constricted by set bandwidths by type of circuit, Broadwing Communications LLC offers MultiConnect, a flexible service with distance-insensitive pricing that allows private lines to compete with VPNs and frame relay services. Rather than buying 14 separate DS1s with their own pricing, a customer can purchase a DS3 and fan it out from a central hub to 14 composite DS1s for each remote location. The concept scales to connecting 1,344 locations from a single OC48. Meanwhile, CoreConnect, launched last year, gives large customers greater purchasing and provisioning flexibility; customers purchase pre-provisioned private-line ports and turn up bandwidth as required. CoreConnect Flex allows companies to reserve aggregate bandwidth at a reduced rate and turn up circuits as required.
With these packages and bundles, weve made it easier for agents and VARs to add private line into their own solutions, says Jamey Heinze, director of data services at Broadwing. If they focus on security, they can manage the SAN (storage area network) gear and use our transport to create a total package.
For the agent selling WAN technologies, the job has become more consultative than ever. Sitting down to understand the needs of customers and their networks includes asking a litany of questions: How many users at each site? Is the traffic between sites latencysensitive? Does the customer already have equipment in place? What kind of expansion does the customer see in the future? What kind of disaster recovery plan is in place to protect critical data and sites?
Armed with this information, an agent may put together a customized solution for a customer that includes private-line, Ethernet and other local access options.
The best advice we can give to an agent is continue to educate themselves on the changing face of telecom, says Selbert. Bandwidth demands from the customer can vary dramatically from site to site, and customer premises equipment options are vast and need to be looked at as part of the overall solution for each customer. But private line is still a core piece in many customer networks, because of the reliability and security that it provides.
|American Telesis Inc. www.american-telesis.net
Broadwing Communications LLC www.broadwing.com
Progress Telecom LLC www.progresstelecom.com
Vertical Systems Group Inc. www.verticalsystems.com