CIS STRATEGY REVIEW Project Status Update

Transcription

1 CIS STRATEGY REVIEW Project Status Update Jen Leasure September 17, 2009

2 Project Scope and Status

3 Project Background Under its CIS program, The Quilt has issued 5 CIS RFP s with the most recent RFP issued in January With the exception of updating technical requirements and shifts in priorities for evaluating vendor responses in certain areas, the program has remained focused on an aggregated approach for purchasing bandwidth from Authorized Quilt Vendors for speeds including DS3, OCn, GigE and 10GE. As the CIS marketplace continues to shift and price per meg is driving toward single digits, it is an opportune time to review the current CIS program ahead of the next RFP effort. The CIS Strategy Review Team has actively participated in review team conversations representing the needs of their organization and associated Authorized Quilt Buyers. The desired output of the Review Team is to develop a set of recommendations for The Quilt to pursue within the scope of its next RFP effort to ensure the continued value of the CIS program to Quilt members.

4 CIS Strategy Review Team Jeff Bartig, WiscNet Cas D Angelo, SoX Jan Eveleth, PNWGP Mark Johnson, NCREN Steve Petko, 3ROX Dave Reese, CENIC Leo Donnelly, Harvard Jen Leasure, The Quilt Colleen Driscoll, The Quilt

5 Progress Identified vendors to hold informational meetings with to explore marketplace 4 out of 5 vendor initial discussion completed Qwest Level 3 (scheduling follow-up) Cogent Verizon Sprint (to be held on ) AT&T - TBD

6 Attention Areas

7 Attention Areas Capture buying issues across Quilt Membership to address as proceed Commit Levels Stringent procurement rules Negotiating rates procurement rules for some institutions leverage Quilt rates to circumvent own RFP If negotiate rate with vendors outside of RFP how impact members who have competitive process requirements Organizations Leadership pushing for lower pricing given economic times

8 Attention Areas How enable better partnerships on both sides Commit to single billing Quilt not take on liability, but create super aggregation points to produce fewer bills Level 3 state way to drive down costs and less responsibility for Level 3 Explore with membership, Level 3 and other vendors What members willing to be super aggregation points? WISCNet already does super aggregation points in Chicago 10 gig connection w/ 1 gig commit Cogent Keep billing simple Flat rate and monthly fee pass on per meg pricing Handle significant failures on network

9 Attention Areas Varied costs for others services-ds3 and OCN-difficult to secure pricing Remove those services from pricing and handle one-offs given reduction in demand Request that vendors renew/continue to honor existing pricing for discontinued services under Quilt Based off CIS survey most circuits Ethernet Would circuits still count towards the aggregate? May depend point to consider

10 Attention Areas RFP pricing more public than sit down negotiation Ensure obtaining most competitive pricing Additional service offerings outside of current CIS Program Layer 2 services Open mind on how best work together encourage out of the box/creative vendor business model Communicate to vendors that R&E dollars go to companies that offer additional services Work with vendors to direct customers to go through Quilt Members

11 Attention Areas Look to sign longer term contracts 5-7 years vs. 2-3 Most come with improved pricing amendments Gauge interests in signing loner term contracts and move of RFP Process of every 2 years Target range $5-$7 for pricing what see in market place and try to drive towards in program Look to Verizon, AT&T, Sprint given shift to wireless platforms Capture mobile traffic to utilize in negotiation and provide vendors more streams of revenue other than bandwidth/on-net Mobile traffic and collective bandwidth

12 Attention Areas Engage with Internet2 and NLR Initial conversation about how I2 Members seek commodity internet services I2 wished to extend offering to members ability to negotiate good deal, beneficial, coordinated with approach of Quilt if possible I2 wants to help members and looking to coordinate in order to provide services for members - Realize Quilt program is extremely important Follow-up with Internet2 after vendor conversations

13 Vendor Engagement

14 Vendor Engagement Qwest, Level 3, Cogent, Verizon What is your assessment of the current CIS marketplace? Consolidation slowed given economic downturn Extremely competitive markets Price compression over last 12 months, end or 2008 and early 2009 Still potential for consolidation given price points in downward trend and efficiently manage networks Not see big changes on horizon, taken course for larger providers Smaller may still occur especially as pricing declines Consolidation has slowed down especially among Tier 1 providers Anticipate more consolidation to happen with Tier 2 providers

15 Vendor Engagement Cogent Cogent s Position in the Marketplace Will continue to be price leaders First time utilized deeper discounts for multi-year contracts not likely to go beyond 3 years In the last standardized pricing announcement Saw some Tier 1 leaders follow but not all On-net pricing seems to have found a settling point For Tier 2 Cable providers and CDN s more active in IP space Expect that we will continue to see price wars in specific cities dropping lower than national prices Depending on market characteristics may see another drop in Cogent standardized pricing next year not out of the question

16 Vendor Engagement Qwest, Level 3, Cogent, Verizon Value of Quilt Program What elements of the program work well? Maintain support with liaison/single points of contact Monthly calls beneficial Add Lunch and Learns Add slot at Quilt MM for vendors Appreciate The Quilt s CIS Program that gives credibility and option to get in door within university community What suggestions or ideas would you have for modifying the program that could provide additional value to both The Quilt and your organization? VoIP on sip-trunk requested from community - sip trunking; ip toll free and ip long distance Offer services but not mandatory loose bundling

17 Vendor Engagement Qwest, Level 3, Cogent, Verizon Value of Quilt Program What elements could work better from an operational/engagement perspective? Disconnect between IT Dept and Procurement Dept of R&E organizations Explain proactively to universities and R&E to understand benefits of using Quilt CIS Program Continually review and update Quilt Authorized Buyers on value Educate potential new customers of CIS Vendors and Quilt

18 Vendor Engagement Qwest Product Focus Better bandwidth -Evolving as market place changes Outsourcing, continue to provide value and remain efficient Changes to support100g speeds IPv6 later this year Hosted unified platform Scalable and built in Qwest Cloud Cisco provider on backend Loose bundling and continue focus on ISP DDos mitigation service - done at 'cloud level' to take action on attack and mitigate to decrease availability impacts

19 Vendor Engagement Level 3 Product Focus 100 gig roadmap Working with vendors and field trial in 2010 and generally available in 2011 Can t offer service until have equipment working with optical vendors Working with variations now Extended On-Net Uptake No signed contracts yet Sent proposals to requestors to include numbers in their proposals Working with universities directly for video services VYVX - MDMS

20 Vendor Engagement Cogent Product Focus Deployed Cisco ASR9000 s for higher port density higher bandwidth options IPv6 available now to customers upon request with MRC of $50. Quilt anticipates that this fee could be negotiated for R&E. Cogent set fee as a barrier to entry for folks who wouldn t utilize IPv6 if Cogent provisioned for them. Cogent launching a managed server product in the next few months not supporting cloud computing but to provide support to customers who do not have the technical expertise to maintain servers on their own

21 Vendor Engagement Verizon Product Focus Exciting areas in broadband to private/home market 100 meg to home in 2010 Plan to do with 4G LTE - current market trials and in 30 cities by 2010 and beyond, 2013 entire country Ability to conduct mobile broadband on move like broadband in home today Open network to any device interoperability - including applications Business-mostly small business see demand uptake in LTE products Bundling voice, ISP, Emerging media/entertainment LTE Experience in meeting requirements for deployment of IPV6 by assisting Dept. of Defense To date experience only in federal marketplace not higher Ed or K-12 State that it is available upon request today for no additional fee

22 Vendor Engagement Qwest What can we do to ensure Authorized Quilt Buyers continue to receive the lowest pricing per meg available throughout the life of a Quilt-AQV MSA? Qwest open to explore ways to work with The Quilt to understand what do to assist in driving down costs Discussed signing longer term contracts with adjustments made over span to reflect competitive pricing Qwest works hard on contracts terms to ensure it is kept fresh Commit levels were lowered from 3G to 2G for 10 gig in last Amendment

23 Vendor Engagement Level 3 What can we do to ensure Authorized Quilt Buyers continue to receive the lowest pricing per meg available throughout the life of a Quilt-AQV MSA? Quilt administratively supporting supper aggregation points drive down cost per meg WiscNet does today better price than individually even better pricing if commit to higher commit levels Level 3 Ability for The Quilt to step up and take on financial responsibility shift in operational billing of several to 1 The Quilt loose aggregation but add value to end points Less customers on record Exploring ways to address a Quilt Buyer of Record with Level 3 what type of relationship can support this?

24 Vendor Engagement Cogent What can we do to ensure Authorized Quilt Buyers continue to receive the lowest pricing per meg available throughout the life of a Quilt-AQV MSA? If all things stayed the same in the RFP will see Cogent s response reflect aggregated benefit to Quilt AQB purchases, even for on-net pricing. Want to ensure that The Quilt is getting opportunity for even improved pricing over marketplace given amount of committed spend with Cogent 55G commit currently Auto-renewal of Cogent contracts has been an issue for AQB s in the past