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The network is designed to offer flexibility, reduced cost of operations, and pay-as-you-go pricing, with free Starbucks latte for everyone! (We made up the part about Starbucks.)

Pacnet Turns On SDN in APAC, US

Mitch Wagner
2/18/2014
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Regional wholesale operator Pacnet plans is launching its software-defined intercontinental network in Asia/Pacific and the US today, leveraging its control of undersea cable capacity to deliver enhanced networking flexibility, reduced cost of operations, and pay-as-you-go pricing.

The Pacnet Enabled Network (PEN), which launched in beta in November, becomes generally available Tuesday, powered by 18 datacenters in Australia, Hong Kong, Japan, Singapore, and now the US. It's designed to enable enterprise and carrier customers "to rapidly and cost-effectively create the foundation of a virtual, integrated data center" using software-defined networking (SDN), according to a statement from Pacnet . (See Pacnet Gets Agile With SDN.)

Pacnet's Layer 1 ownership is key to PEN's value, Jim Fagan, president of managed services for Pacnet, said in a phone interview. "We have this massive network in Asia-Pacific, an international network of submarine cable systems. We have control of the network all the way through the technology layers. This gives us an amazing amount of control and flexibly of the networks," he said. PEN is designed to pass that control and flexibility on to customers.

US availability of the service is designed for organizations needing to do business with Asia-Pacific partners, Fagan said. US customers will need to have a point-of-presence in Los Angeles to connect to the Pacnet network.

Designed for flexibility
The service is designed to be highly flexible, with its software control plane able to configure the network in minutes, rather than the days or weeks required for conventional networking. As Fagan explained to my colleague Robert Clark in November:

    Currently "the customer goes to the sales rep, who has to check the inventory. Then there's a pricing discussion, then it has to be manually provisioned, then the circuit is tested, and then the customer has to accept it." That can take nearly three weeks and the customer is locked into a one- or two-year fixed contract.

"We're looking at it as the Amazon model, paying for what you use, but also tying in the benefits from private connectivity," Fagan told me Monday.

Using Pacnet, customers can designate specific quality of service levels on specific routes, or just configure best-effort to reduce cost. Users can buy bandwidth by the hour, for example for backup or migration.

Relatively small
Pacnet is a relatively small company, with $500 million in revenue and 800 employees. But it's focused on networking and the datacenter, where bigger competitors are less focused, Fagan said.

While cannibalizing its existing wholesale business is a worry for Pacnet, the company believes it will eat into more of its competitors' business than its own. "If I had revenue as large as my competitors, I might not be so excited to be leading disruption in the industry," Fagan said.

Pacnet plans to expand the PEN service to South Korea and Taiwan next.

The flexibility comes from the use of Vello Systems 's Connectivity Exchange application, which runs on the vendor's VellOS Linux software platform. Vello's software enables Connectivity Exchange, which includes virtual cross-connect capabilities, to configure and manage the network.

Simplifying migration
"This is about simplifying the way that [Pacnet's] tenants can migrate the applications they're hosting and be able to cut-and-paste those throughout the Pacnet network," Karl May, Vello president and CEO, said.

The Pacnet service will prove attractive to customers, said Heavy Reading analyst Caroline Chappell in an email:

    Service providers want the flexibility of being able to switch between optical and packet layers of the network, depending on the needs of individual customers [and] applications and Vello is one of the first companies to support this using Openflow. The Pacnet win is an endorsement of this approach -- which is highly appropriate, if you think about it, for a service provider that is bridging datacenters on both sides of the Pacific with subsea optical links in between.

Vello is "targeting specific use cases rather than trying to be an all-purpose SDN vendor," Chappell said. Application-driven on-demand bandwidth management is one such use case. "Again, this would be highly appealing to Pacnet's enterprise customers who are familiar with the cloud and buying infrastructure on demand services (IaaS) and want to do the same with networks -- hence the Network as a Service (NaaS) tag," she said.

Enterprise customers are asking B2B service providers for pay-per-use networking rather than fixed-bandwidth connectivity services, which are invariably over-provisioned, Chappell said. If Pacnet succeeds, other service providers will likely follow with their own pay-per-use services, possibly to Vello's benefit.

— Mitch Wagner, Circle me on Google+ Follow me on TwitterVisit my LinkedIn profileFollow me on Facebook, West Coast Bureau Chief, Light Reading. Got a tip about SDN or NFV? Send it to mwagner@lightreading.com.

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