Why would a small company start to think about creating a WAN?

One of the biggest changes going on right now in the telecom industry is the use of IP-VPN or MPLS services as technology used to provide companies WANs or Wide Area Networks. A WAN is simply a network dedicated to sending data to multiple sites. Typically this was done over Frame Relay or ATM technology in the past and usually the costs were expensive. Today that's changing rapidly as most carriers can provide secure private data access over their networks using a technology called MPLS or Multi-Protocol Labeling Switching. Essentially this allows networks to securely move data traffic from site-to-site over IP but can also tell what type of traffic it is.

Well let's back up for a second. The types of traffic that people send today could include critical data from applications, voice or video, general internet traffic (i.e. browsing websites), or e-mail or file sharing traffic. Of course not all this traffic has the same priority or shall we say should have the same priority when traveling from one LAN (Local area Network) to another LAN. The reality is that voice and video typically need to travel without interruption over a WAN otherwise the process by which we hear or see the traffic on the other side can be a problem. Basically this is why some VoIP calls sound garbled or echoed. Other traffic like mission critical data should also take priority over a circuit as it becomes crucial to processes and users from the other side of the connection. MPLS allows you to prioritize traffic so that some data types can always take precedent over other data types. Also traffic riding over an MPLS network doesn't necessarily travel with the traffic of the public internet making it much more secure and efficient. One of the biggest reasons some VoIP services are viewed as bad quality is that its riding with public IP rather than other private networks.

The key is that its makes it much easier for multiple types of traffic to share the same data circuits instead of the old days where a company had to purchase multiple circuits for different types of data. As we move into an all IP world this major cost is starting to go away. Now the point I want to really make is where this newer technology can really make a huge impact with smaller companies. Recently I was working with a couple of companies who only had two sites; one was their main headquarters and the other was a remote office. When I saw what they were doing as far as connecting the two offices for data purposes I found two classic older methodologies in use. The first was a private line which is essentially a circuit that uses 'clear channels" to talk to both offices and is directly connected from one office to another. This means that on a standard T1 there are 24 channels or trunks that can used to move data and sometimes voice. The problem is that it has to be one or the other. Typically private lines are channelized where half of the pipe (thats industry jargon for circuit) is for voice and the other half is for data. The end result is less bandwidth is available for both applications to run over the circuit.

The other methodology was using a VPN between sites or a Virtual Private Network. I do not want to go too in depth with what a VPN actually is or how it works but they are very common these days and can work well for many companies. The problem is they too have limitations. First they create a lot of overhead on bandwidth when used constantly as they can be when connecting two offices. If you have one T1 let's say for Internet access which gives you 1.5 MB of bandwidth, when you start using a point-to-point VPN connection you start to eat up a lot of that bandwidth. Although it might work great for the intermittent data you plan to send to another office it might also really slow down people in your office who need access to the web. There are other problems that can make a simple VPN connection not an optimal solution for a company such as latency, management of routers, lack of true QOS (Quality of Service).

Today MPLS or IP-VPNs allow companies to set up a true WAN for connecting offices but for many people they see this as only a solution when they have multiple offices or a lot of different types of traffic. I disagree. I think even small businesses with just two locations should start taking a serious look at creating WAN connectivity using MPLS technology. The reason is that there is a major shift going on in the industry in how typical T1 circuits are sold. Most carriers offer some type of dynamic T1 solution these days whereby voice and data are utilizing the full bandwidth of a circuit and although voice communications on the internal network or the hand off to a PBX might be analog in nature the back-end transport of the voice is IP. This is the typical first step into VoIP that most companies take while not having to change the older phone equipment they have today. But there is more to offer on these dynamic T1s. Usually a carrier who has MPLS in place as a product can easier open up an MPLS port on the same dynamic circuit they use for voice and internet. Now for not much more additional monthly cost that same circuit can handle multiple types of traffic including application data that in the past either had either a separate private line or VPN connection in place to handle it. The benefit is more efficient use of traffic over less amount circuits and at the end of the day the less circuits you have the less fixed monthly cost you spend on your total telecom bill. Also there are other benefits like its easier to support real-time priority of IP voice traffic especially for companies who are upgrading their PBXs. In the old days they were told by vendors you have to use a private line since its the only way I can get calls from one office to another office so two older PBXs can talk to each other. Today there are new boards and upgrades for older phone equipment where everything can ride over IP and if an MPLS connection is in place voice can take first priority over the circuit so the quality of the voice service can be maintained without latency.

Keep in mind that some companies pay nearly $800/month for connectivity over a private line and many IT professionals spend a lot of time trying to get VPNs to work correctly. A carrier can offer a company a T1 for their voice and internet services and typically can offer the addition of an MPLS port on that circuit for an estimated $200 - $250 more. As companies try to consolidate their services they will find that this model makes a lot of sense for the future concerns or challenges they are trying to solve when talking about data transfer between offices. For the two companies mentioned previously, it meant over $1000/month of cost savings and more overall bandwidth available for end users at each office.

-King of Telecom