Monday, July 07, 2008

Bandwidth Windfall

Money's tight and getting tighter. That's bad news, since breaking into new markets and the new revenues the company needs is dependent on a big step-up in WAN (Wide Area Network) bandwidth. More bandwidth, more expense. No more bandwidth, declining revenues. It seems like an impossible situation. You don't need another big expense. You need a bandwidth windfall.

Conventional wisdom says that anytime you increase bandwidth you pay more. You pay so much for 1 Mbps. You expect to pay more for 10 Mbps. Perhaps not 10 times as much, but a substantial multiple. The best you can hope for is that the cost per Mbps will decline somewhat as you use higher levels of bandwidth. A volume discount, if you will.

But is it possible to get more bandwidth but pay less? Not just less per Mbps, but a lower monthly line lease price? That seems counterintuitive. But it it were possible, that would be the kind of bandwidth windfall that opens new business opportunities.

Traditional telecom line pricing says that such windfalls are impossible. But there are actually two ways you can get more bandwidth and pay less. This is especially true of dedicated Internet connections, but also applies to point-to-point private lines as well.

The first approach has been available for awhile. It involves going where the bandwidth is. That means a colocation facility, also called a carrier hotel. The hotel designation indicates that many carriers are housed inside the facility. That's true. But it's also true that some carriers run their own "hotels" with only their bandwidth services available for business tenants.

Both private carrier and public colocation facilities have similar setups. You move to the colo facility by physically locating your servers and other network appliances in the colo data center. You equipment is secured by locked cages and a full time security staff, but it's outside of your own server room. You upload, download and otherwise control your remote equipment via a secure broadband connection, such as a T1 line.

The reason that colocation bandwidth is such a bargain is that each carrier establishes a POP (Point of Presence) at the facility with major fiber optic bandwidth they need to sell. Construction costs to connect to that bandwidth are virtually nil. After all, you are in the same building. Often the colocation operator will run or supervise the drops from your desired carrier to your equipment.

The other bandwidth windfall has only recently become available. It is known as Metro Ethernet or Carrier Ethernet. These terms often refer to the same service, although Carrier Ethernet can be a long haul as well as a metropolitan area service.

Ethernet WAN connections usually start at Ethernet speeds of 10 Mbps and go up to 100 or 1000 Mbps at very affordable rates. The higher bandwidth levels require fiber optic connections, although you can often get 10 Mbps and even 100 Mbps over standard copper telco wiring if you are located close to a carrier POP.

Here's a bandwidth windfall for you. Average pricing for 100 Mbps Fast Ethernet service is significantly LESS per month than traditional DS3 bandwidth at 45 Mbps. Over twice the speed for less expense. Is that the type of windfall you were hoping for?

Click to check pricing and features or get support from a Telarus product specialist.

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