'We scale on everything else, why not bandwidth?' The advent of networking on demand

Cloud is driving the moribund telecoms industry to be more flexible, argues Colt's Mike South

Enterprise IT has changed a great deal in the last decade or so, from a fixed investment with recurrent costs to a model that's more service oriented, available on demand. This change is both exemplified and driven by the cloud. Why pay for something that you only use occasionally when you can buy what you want, when you want it?

However, there is one major IT sector that has been slower to adapt to the on-demand model - mostly because its assets are heavily invested in fixed infrastructure - telecoms and networked service providers.

"The telecoms industry has not kept up with the pace of innovation," said Mike South, product manager cloud connectivity and on demand services at Colt Technology, during a Computing web seminar entitled How to demand more from your enterprise network carrier.

"The de facto standard is for multi-year lock, but in the enterprise market we're seeing a new model emerging where companies don't have to do that anymore."

The main driver for this, South said, is the increased use of cloud. A company might want to perform a cloud migration over six months. Alternatively it might want to connect two data centres together for a short period of time, or it could require increased broadband for a matter of a few days, as with a media organisation that needs to cover a major event via streaming video.

"The cloud is rubbing off on technologies such as SDN [software defined networking] and NFV [network functional virtualisation]," South went on. "We're still at the beginning of the journey but we're starting to see a more flexible model coming into play."

Like cloud, which took several years to be accepted as a viable model for business - and which still has its doubters - more flexible networking will not happen overnight, especially given that most organisations are still accustomed to (or tied into) multi-year contracts with their carriers, as shown by Computing's research among IT leaders in medium to large organisations.

Luke Braham, IT manager at global staffing agency Red, professed himself surprised by the number of firms on long-term contracts, saying that his company investigated more flexible connectivity years ago.

"Why every three years, why not renew every year?" he asked, rhetorically. "We scale on everything else these days so why not scale on bandwidth?"

Red has grown rapidly in the last 18 months, Braham went on, and is very much a cloud-first business meaning that it sees scalability as a key factor in any IT decision.

The reticence of many firms to review their telco contracts may be a relic of linear thinking in organisations whose growth trajectory is less meteoric than Red's. Nevertheless, the ability to flex is increasingly important to all firms, not just those that are "cloud native" or heavily technology focused.

Colt's South argued that too many enterprises simply accept the status quo, failing to think outside of the multi-year contract box. The market is evolving, he insisted, and new types of virtualisation like SDN and NFV are bringing granular controls and flexibility within the reach of more organisations - but of course they have to know that services are available and believe the switch would be beneficial.

It's not about cost, South insisted, although for some companies, particularly those that experience peaks and troughs in demand, networking on demand might indeed be cheaper. Rather it is about consolidation, simplification and automation leading to increased business agility.

"There are efficiencies to be made, but it's not just a cost efficiency story it's a customer journey story as well," he said.

"There's an inherent efficiency in transacting with telcos in this way. It's about interfacing using a web portal; it's having 20 pieces of information to input rather than 250. There are lots of soft benefits too, it's just a more efficient model, and if you want to scale it's very easy."

South continued: "Let's say you want a fat 10 Gigabit pipe from your data centre into the Amazon or Microsoft Azure cloud for one week, what are your options now? You could get it upgraded and downgraded but it will take three months. With the new model you just pay for that week. The flexibility is there when you need it."

The web seminar, How to demand more from your enterprise network carrier, is now available to view on demand.