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Buying MPLS: Managed service providers versus carriers

Sometimes a smaller managed service provider can be a better option than a brand-name telecom carrier for your MPLS wide area network (WAN).

Sometimes a small managed service provider can be a better fit than a brand-name carrier when deploying a new MPLS wide area network.

Many managed service providers (MSPs) specialize in leasing networks from other carriers and delivering them to enterprises as a managed wide area network (WAN). Some of them could be described as value-added resellers (VARs), according to Lisa Pierce, an independent consultant.

MSPs often have a more granular focus on their markets, offering services to specific vertical segments. Other MSPs tailor their services to midmarket firms more than to large enterprises. Pierce said these providers can often be "semi-turnkey" in nature, making it easier for customers to work with the MPLS WAN.

"There are MSPs that will lease capacity from major providers, or there are VARs that essentially just resell networks and lay on a special sauce of managed services," Pierce said. "For instance, Ivans specializes in serving parts of the insurance and healthcare industry, so they have special applications for those customers they support. But they're reselling a subset of AT&T's services."

Many MSPs lease lines from multiple network carriers; this can also be attractive to potential customers looking for redundancy. MSPs such as Masergy and Virtela Communications often own their own routers, but they lease capacity from more than one network carrier to deliver MPLS services.

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"Going with an MSP that relies on more than one provider is important because it gives you relative reliability," Pierce said. "Certain MSPs will use multiple facilities-based providers to create their network to add redundancy and diversity. Some companies like that. Often, if you go with a facilities-based provider, they don't want you to use anyone else."

Bob Andreini, director of IT for Measurement Specialties, a Hampton, Va.-based manufacturer of sensors and sensor-based systems, hired Virtela more than a year ago to provide his company with an MPLS network, after having a terrible experience with a single-source WAN provider that he declined to name.

"The fact that [Virtela] wasn't a carrier was very attractive to us," Andreini said. "They do best-of-breed. So whatever market they are in, they can partner with whatever the best carrier is. They're not tied to any particular market."

Years ago, Measurement Specialties got by with a point-to-point T1 connection that linked its Virginia headquarters to its manufacturing plant in China. However, as the company grew through acquisition across the United States and Europe, it stuck with the provider of the original point-to-point line.

"We ended up putting in an IP VPN network," Andreini said. "But then we started expanding into Europe, and depending on where we ended up, we would install either a node on our VPN or a point-to-point connection coming into a router in our Hampton office. If we couldn't do that, we'd put in some firewalls and be doing a VPN tunnel through the Internet. It was kind of a mess."

When the company's legacy WAN provider was bought out and consolidated, service went way down.

"We were measuring downtime in days per quarter," he said. "There was a lot of finger pointing."

Andreini or someone from his staff would spend hours on the phone with the WAN provider trying to figure out what was wrong. Meanwhile, the company would come to a standstill, with remote sites completely cut off from centralized business applications, and critical communications like email out of commission.

"A year ago last July, we had a fairly lengthy outage that lasted about four days," he said. "That was the breaking point. I said, 'I'm done with this.' We actually had guys who would go out and get their own Hotmail account just so they could talk to their own customers."

Andreini said he started looking for a provider that could be a one-stop shop for his MPLS network across his company's 12 major sites.

"Globally, I have about 35 IT pros for all our locations, and the vast majority of them are business analysts," he said. "We don't have very strong expertise in Cisco network router programming. I didn't really want to develop that in-house. Programming is not our core business. I was looking for a partner who could provide me with a port that we could plug our LAN into and then manage everything in between."

At the outset of his search for a new provider, Andreini wasn't familiar with companies like Virtela. He said he looked at carriers as potential service providers, but he was wary of some of the services that carriers had in certain locations.

"Some places where we were, like in China and Europe, they didn't have good options because they would have to go with a reseller, and it wasn't their core business," he said. "Virtela came along and, by design, they work with multiple carriers. One of the things I really like is [that] we run a T1 to one of their remote centers, and from there, there are three to six potential carriers that, based on performance and outages, they can route to. They can basically pick and choose the route to make sure our traffic gets from point A to point B, and we don't even need to know that's going on."

Pierce said companies considering MSPs for their MPLS networks should have a clear understanding of where the provider has small-site and large-site connections -- where it can provide T1 connections, for instance, and where it can provide T3 or optical connections.

Companies might also want to check on whether the provider can offer wireless remote connections and whether it can offer both MPLS and switched Ethernet services, depending on the company's needs, she said.

Most managed service providers are rather small when compared with the multi-billion-dollar carrier networks on the market. They typically earn between a few hundred million and $1 billion in annual revenue, Pierce said. There is some risk inherent in relying on a smaller company for an MPLS network, so it's worth researching the health of the company and the quality of the services it provides.

Pierce said companies should talk to reference customers when considering a managed service provider for MPLS. "I typically encourage customers to ask for reference customers who have been using the services for between six and 18 months."

"We did our due diligence," Andreini said. "We got references. As it turns out, one of our largest customers had gone up on Virtela months earlier, and we were able to talk to them about their experience. That helped get our CEO comfortable, because Virtela isn't exactly a brand name like AT&T or Verizon. So we were trying to get an understanding of who they are as a company and how they do business. After we talked to several companies that have been working with them for some time, we got more comfortable with them."

 Before you decide on an MPLS service, IT managers should understand the three different classes of MPLS services: Find the the best MPLS/VPN service for your WAN, in this technology primer.

Let us know what you think about the story; email: Shamus McGillicuddy, News Editor

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