Managing LAN/WAN Integration With MPLS IP VPN
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- Suzanna Lester
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1 A Custom Technology Adoption Profile Commissioned By AT&T May 2012 Introduction Both wide-area networks (WANs) and local-area networks (LANs) will be upgraded to support new advanced communications applications, including VoIP (convergence), telepresence, and unified communications (UC). To successfully deliver consistent end user experience across geographies, close WAN/LAN integration will also be important. Many multinational corporations (MNCs) self-manage their IP telephony, videoconferencing, and UC solutions today, but as the complexity of networks grows with the adoption of these newer communications applications, achieving performance and cost efficiencies while adopting and managing performance-sensitive applications becomes a challenge. The starting point for many MNCs is outsourcing their global WAN based on MPLS IP VPN. A growing number are turning to outsourcing, managed services, and as-a-service (multitenant/ shared infrastructure) solutions that include their multitechnology WANs (e.g., site-to-site MPLS IP VPN, site-tosite carrier Ethernet, site-to-site Internet VPN). This Technology Adoption Profile examines the drivers leading large North America-based MNCs to pursue WAN/LAN integration, the benefits they associate with managed telecom and network services, and their current and future plans for managing their networks. MNCs Need Solid WAN/LAN Integration To Keep Up With New Communication Needs MNCs need good WAN/LAN integration for convergence, video, and unified communications. The vast majority (84%) of large multinational enterprises surveyed in the Forrsights Networks And Telecommunications Survey, Q are already using LAN-based voice over IP (VoIP), and a majority (53%) have implemented WAN VoIP (see Figure 1). Additionally, a growing portion of distributed companies are embracing video to help reduce travel and make it easier for distributed teams to work together. They might start either with immersive telepresence, which is usually a C-level decision given the very high cost of those systems, or with desktop IP videoconferencing as part of their desktop collaboration implementation. Already 70% of distributed firms have adopted or plan to implement desktop IP videoconferencing, and 42% have adopted or plan to implement immersive telepresence. This likely will push most of these firms to seek tighter integration of not only IP video endpoints but also with their HD video rooms and portable units. UC experience also will be a catalyst for many MNCs for WAN/LAN integration as UC solutions are implemented throughout their distributed organizations. Most large organizations with several international business locations struggle with internally managing a (now typical) multitechnology WAN environment that includes MPLS, carrier Ethernet, and Internet VPNs. Among the most important factors when integrating different technologies in a large MNC s WAN are the ability to use the same access link for voice and data traffic and to easily and quickly increase connectivity capacity as needed (see Figure 2). Also important for many firms with distributed operations is the ability to install new services quickly, benefit from lower-cost new technologies, and apply flexible bandwidth options for different site sizes and types. Much of this relies on the ability of the user company or its preferred service provider to establish
2 effective working relationships with local providers in overseas markets to assure easier and faster processing of requests for new services and connection upgrades. Figure 1 MNCs Need Good WAN/LAN Integration For Convergence, Video, And Unified Communications Base: 166 North American telecom decision-makers with international responsibility at firms with 1,000 or more employees *Base: 377 North American telecom decision-makers with international responsibility at firms with 1,000 or more employees Source: Forrsights Networks And Telecommunications Survey, Q1 2011, Forrester Research, Inc. Figure 2 International WANs Need To Be Easy To Provision, Upgrade, Manage, And Change Out Base: 167 North American WAN decision-makers at multinational enterprises planning to use MPLS as a core model for their international WAN over the next 24 monthss Source: A commissioned study conducted by Forrester Consulting on behalf of AT&T, March 2012 Page 2
3 MNCs Are Looking To MPLS, And Third-Party Management Is Compelling In March 2012, AT&T commissioned Forrester Consulting to delve deeper into the technology and management approaches that large MNCs are interested in related to international WANs. We discovered that MPLS, across all types of management, is the approach expected to dominate for 186 MNCs surveyed (see Figure 3). Those in the process of migratingg most or all their international sites to MPLS IP VPNs are primarily interested in vendor- to managed services, with almost half (47%)of organizations surveyed expecting a fully managed MPLS model make up their core deployments and 42% expecting to use a co-managed or partially managed MPLS approach. A high portion of survey respondents also expect their firms to use other WAN technologies alongside MPLS IP VPNs. Expected use of carrier Ethernet suggests that new E-Line and E-LAN standards-basedd WAN servicess are in early days, but MNCs adopting this model are likely to be seeking a co-managed or fully managed approach. Internet VPNs are popular today, and their popularity will continue, with self-managed or co-managed Frame Relay and private leased line models will be replaced with IP and Ethernet, but where they remain, the preferred approach will be being the preferred approach of large distributed organizations. Legacy VPNs like point-to-point self-managed. Figure 3 Partially Or Fully Managed MPLS IP VPN Is Expected To Dominate MNC WAN Models During The Next 24 Months Base: 186 North American WAN decision-makers at multinational enterprises Source: A commissioned study conducted by Forrester Consulting on behalf of AT&T, March 2012 Outsourcing WAN management can help distributedd organizations optimize performance of new communications applications. A growing portion of companies with distributedd international operations see value in outsourcing network and telecoms solution managementt to a third party. Why? The main reason is expected overall cost savings, identified by 70% of MNCs surveyed by Forresterr Research. Additional drivers for MNCs to use third-party managed networks and telecom servicess are to focus internal network and telecoms Page 3
4 teams on core competencies (60%), to simplify IT operational management (55%), and to reduce upfront capital outlays for communications hardware and software (53%). In addition, many MNCs use third-party managed services because they provide more flexibility (51%), help avoid or reduce IT headcount (40%), provide improved performance or service delivery (35%), and/orr mitigate the risks of undergoing technology change (34%) (see Figure 4). Figure 4 Outsourcing Helps Many Organizations Optimize Performance Of New Communications Applications Base: 206 North American decision-makers at firms with 1,000 or more employees who are responsible for multi-country network and telecoms technology decisions and report expanding use of managed or as-a-service solutions as a high or critical priority Source: Forrsights Networks And Telecommunications Survey, Q1 2011, Forrester Research, Inc. Using multiple WAN technologies increases the complexity of LAN/WAN integration and management, which is required for performance-sensitive applications such as site-to-site VoIP, videoconferencing, and unified communications and collaboration. Almost half (49%) of the largee MNCs surveyed in the Forrsights Networks And Telecommunications Survey, Q1 2011, were already using third-party managed or outsourced MPLS IP VPNs (see Figure 5). 1 Nearly as many (48%) were using third-party managed and outsourced site-to-site carrier Ethernet WAN services, whereas just over a quarterr of them (26%) were using third-party managed or outsourced Internet VPNs. In the future, slightly more respondents (42%) expect their organization will be interested in using managed MPLS IP VPNs, but twice as many as today s users (18%) think their firm will be interested in outsourcing MPLS WAN management, increasing thee combined interest in future managed or outsourced MPLS IP VPNs to 60%. A similar pattern, although more modest, is anticipated for carrierr Ethernet WAN services. Whereas 35% use third-party managed carrier Ethernet today, 39% expect their firm will be interested in doing so in the future, and whereas 13% of respondents organizations have outsourcedd carrier Ethernet, 18% expect their firm will be interested in those services in the future. Whereas just over one inn five of the firms surveyed use managed Internet VPNs and only 4% have outsourced their Internet VPNs, nearly half (47%) of them think their firm will be interested in using either third-party managed (37%) or outsourced (10%) Internet VPNs in the future. Page 4
5 Taken together, these findings suggest that distributed organizations recognizee there are inherent complexities involved in managing a multitechnolo gy WAN environment across multiple geographies on an ongoing basis that third-party solutions could mitigate. Figure 5 Complexity Of Using Multiple WAN Technologies Pushes Interest Inn Managed Services And Outsourcing Base: 166 North American telecom decision-makers with international responsibility at firms withh 1,000 or more employees who have implemented these technologies Source: Forrsights Networks And Telecommunications Survey, Q1 2011, Forrester Research, Inc. The complexity of implementing and managing multiple WAN technologies across geographies often leads distributedd organizations to try to consolidate service providers. Companies with business operations in many markets overseas often expect to single-source their global MPLS IP VPNs either with a global network operator or, when contemplating a broad IT outsourcing arrangement, with a major systems integrator. In the AT&T-commissioned study, just over a quarter of respondents (26%) indicatedd one of these two preferences (see Figure 6). While 9% of respondents expect to use a specialistt for their global MPLS IP VPN, 7% expect to use either a global operator or a specialist to complete their migration to a fully managed global MPLS IP VPN for convergence, unified communications, and collaboration including videoconferencing. Additionally, 2% of respondents expect to outsource their WAN in its entirety and also purchase additional services from their WAN outsourcer, like long-distance voice, VoIP, telepresence, and/or a unified communications solution. Companies whose business operations focus on one or a few key overseas domestic markets expect to use multiple operators (indicated by 18% of respondents). The same is true for organizations with an operational structure that dictates a hub-and-spoke network configuration where each of their sites within a geographic region connects to the regional headquarters and data center where , business application servers, and possibly also a centralized IP PBX are housed. A modest portion of respondents (7%) plan to let each business unit decide who they ll use for their domestic and international MPLS IP VPNs. In these cases, a centrally provisioned global MPLS WAN will connect the main sites of the business units with global headquarters. Page 5
6 Figure 6 Single-Sourcing MPLS IP VPN Services Is A Popular Choice For Distributed Organizations Base: 167 North American WAN decision-makers at multinational enterprises planning to use MPLS as a core model for their international WAN over the next 24 monthss Source: A commissioned study conducted by Forrester Consulting on behalf of AT&T, March 2012 Key Takeaways This profile of North America-based MNCs reveals the following WAN/LAN trends and WAN decision-makers key plans for their future networks: MNCs are upgrading to MPLS IP VPNs to support new communications applications. Organizations with distributed international operations are upgrading or completing the migration of their regional and global WANs to MPLS IP VPNs. Quality of service (QoS) prioritization is a key part of MPLS solutions that helps ensure that users worldwide have a consistent experience using performance-sensitive applications such as VoIP, unified communications, and telepresence. LAN/ /WAN integration is also necessary but introduces additional complexity. LAN/WANN integration is needed to tie together standalone on-site IP telephony systems and localized messagingg and collaboration tools at different sites and also enterprise applications housed centrally in a global or regional data center. Single-sourcing global MPLS IP VPNs appeals to the majority y of MNCs. Often it makes a lot of sense to use a single provider for MPLS. Most MNCs surveyed expect to doo this, using their global network operator, a VPN specialist, or an SI, such as when they ve already outsourced many other IT functions in addition to the network. Third-party services help address challenges of multitechnol logy WANs. Fully or partially managed MPLS IP VPNs likely will dominate MNC WAN models. However, because most firms expect to use a combination of MPLS, carrier Ethernet, and Internet VPNs, they re interested in understanding where it makes sensee to use managed network services or outsource some or all of their WAN. On top of this WAN management complexity, the challenges of integrating and managing corporate LANs and WANs also drives MNCs to investigate third-party services often those offered by their sole or a preferred WAN provider. Page 6
7 Methodology This Technology Adoption Profile was commissioned by AT&T. To create this profile, Forrester leveraged its Forrsights Networks And Telecommunications Survey, Q Forrester Consulting supplemented this data with custom survey questions asked of 186 WAN decision-makers at North American enterprises with a multinational presence and 10 or more sites connected to their WAN. Survey questions related to interest in and plans to implement MPLS, as well as both drivers to that adoption, and barriers to implementation. The auxiliary custom survey was conducted in March For more information on Forrester s data panel and Tech Industry Consulting services, visit Endnotes 1 The distinction between managed services and outsourcing rests on how much a user company relies on its service provider to provision customer edge equipment (CPE) and access circuits for the WAN. A fully managed WAN service includes provisioning and management of third-party local circuits that is, end-to-end managed service. CPE usually is owned by the service provider and rented or leased by the customer company but also may be owned by the customer and monitored, maintained, and managed by the provider. An outsourced WAN service for many user companies includes full end-to-end management, including provisioning local circuits. It also could include the sole or a preferred WAN service provider assuming responsibility managing other service providers, governance, and sourcing new services. For this reason, managed and outsourced WAN services constitute degrees of third-party management. About Forrester Consulting Forrester Consulting provides independent and objective research-based consulting to help leaders succeed in their organizations. Ranging in scope from a short strategy session to custom projects, Forrester s Consulting services connect you directly with research analysts who apply expert insight to your specific business challenges. For more information, visit , Forrester Research, Inc. All rights reserved. Unauthorized reproduction is strictly prohibited. Information is based on best available resources. Opinions reflect judgment at the time and are subject to change. Forrester, Technographics, Forrester Wave, RoleView, TechRadar, and Total Economic Impact are trademarks of Forrester Research, Inc. All other trademarks are the property of their respective companies. For additional information, go to [1-I41WRN] Page 7
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