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SDN architectures

Bandwidth-On-Demand May Not Add Revenue

Dynamic bandwidth service capabilities like bandwidth-on-demand will not necessary translate to additional, new near-term revenue for service providers, according to a recent Heavy Reading Insider report.

That notion might come as a surprise to service providers investing in software-defined networking (SDN) and virtualization capabilities. However, the report, "Cloud Boosts Demand for Dynamic Bandwidth," also finds that other benefits of bandwidth-on-demand, such as the ability to provide guaranteed bandwidth and predictable bills, make it an effective customer loyalty tool. Also, dynamic bandwidth capabilities are likely to become more of a future requirement for service providers in increasingly virtualized environments.

"Carriers will need to invest in dynamic bandwidth to keep the loyalty of customers they already have and attract more in an environment in which it is increasingly viewed as a virtual requirement, especially in relation to the cloud," writes report author Steve Koppman.

Even though bandwidth-on-demand may not directly promote new revenue, Koppman noted in his Heavy Lifting Analyst Notes recently that the cloud connection should continue to promote carrier investment in dynamic bandwidth capabilities in the next three to five years.

The report also analyzes different dynamic bandwidth models, making comparisons between the usage-based billing models many service providers have attempted and newer approaches for bandwidth-on-demand, and provides status reports on many carriers that are exploring flexible bandwidth capabilities to varying degrees.

— Dan O'Shea, Managing Editor, Light Reading

DOShea 11/24/2013 | 9:09:20 PM
Re: Bandwidth-On-Demand revenue potential These service levels are a good way to think about how bandwidth-on-demand revenue opportunities would work, though figuring out how pricing will shake out is another challenge.
jimmorin 11/22/2013 | 11:55:34 AM
Bandwidth-On-Demand revenue potential On-demand services have a healthy potential to grow incremental revenues as differentiated services, rather than pure on-demand bandwidth.  For example, carriers will be able to differentiate service levels – something like:

-           "guaranteed premium" that guarantees bandwidth on request

-          "best effort" that might be temporarily blocked but available later

-          and "programmed" that can be scheduled only during certain off-peak times

When thought of as "Performance-on-Demand", even more options for new revenue sources are possible, such as new network services differentiating by path or latency.

On-demand cloud infrastructure services have taken many different forms to meet new and growing customer niches, and on-demand bandwidth will likely follow a similar path.  
tojofay 11/21/2013 | 1:02:35 PM
Re: Not too surprising TSIC reports that its revenues in North America have doubled over the past two years

"...TSIC its 2012 technology/service wholesale innovation award for its
"100GB bandwidth on demand" service based on the company's use of the DTN-X in North America,
noting that "this technical innovation provides a more flexible option for TSIC's customers and a faster
upgrade path from multiple 10G and 40G services."

Ovum

Reference Code: TE008-001384-SR

 
[email protected] 11/21/2013 | 9:55:47 AM
Re: Not too surprising - ROI challenge! "Instead they will be investing in virtrualization and new control/policy systems that let them use what they have more efficiently. "

 

I wonder if the service providers are abl/will be able to quantify the financial/income benefits of those technologies?

 

It seems like return on investment (ROI) equations are getting harder by the year...
Carol Wilson 11/20/2013 | 5:12:54 PM
Re: Not too surprising Instead they will be investing in virtrualization and new control/policy systems that let them use what they have more efficiently. 
DOShea 11/20/2013 | 4:53:16 PM
Re: Not too surprising True. I think it will be interesting to see how the BoD evolution impacts the other side of things. I would think the ongoing need to invest in fatter pipes will begin to slow in a world where set-up and tear-down of needed bandwidth is time-stamped and and bandwidth as a whole made easier to manage.
Carol Wilson 11/20/2013 | 4:45:54 PM
Not too surprising In my conversations with service providers offering BoD, they haven't said they expected more revenue - these services are being delivered more as a response to what their customers are demanding. 

That said, I'm sure the early movers hope and expect this will be a competitive advantage for them and in that sense, drive revenues. 
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