WAN services: Maintaining flexibility is key
Work it into your contracts.
By Jim Duffy, Network World | Network World US | Published: 00:00, 14 December 2005
WAN services experts recommend working flexibility into your contracts: Technology changes fast, as do prices, so they advise you to structure contracts that keep options open.
Coast Capital Savings of Vancouver, the second-largest credit union in Canada, has WAN contracts that run three to five years. Three years ago, the company intermeshed 58 offices with fibre services running VoIP to 2,000 phones.
At the time, the company negotiated "partial QoS" for this network. Had the company known that its telephone company would roll out MPLS-based services, it would have grandfathered in tighter QoS guarantees based on MPLS .
"Three years ago I didn't know much about MPLS," says Luis Henriques, senior network engineer for Coast Capital Savings. "Right now, we're running over a partial QoS network that's working 99 percent of the time, but we do still have one percent worth of problems. You're signing for such a long time, and it's hard to know what new technologies are going to come out there."
Procurement consultants concur.
"If you say, I'm going to do nothing - I'm going to keep the network I have and just get a lower price - that used to be a good strategy in the short term, but it won't work in the long term," says David Rohde, a senior analyst at TechCaliber. "You've got to make some sort of decision about your technology migration now."
Henriques also recommends working the best WAN prices into your contract, whether that price is available when you negotiate the contract or a few years down the road when you need those circuits.
"Today, a 10M bit/sec link costs you $1,000, but you don't actually need any today. In three years, it only costs $200, but according to your contract you're bound to buying it for $1,000," he explains. "You'll want a clause in there to say you'll be guaranteed the best price at the time."
Users should also grandfather service-level agreements into any new circuits they add during the life of the contract.
"When we signed our contract we had 45 branches," Henriques says. "Since then, we've grown and added quite a few more. Fortunately, in that contract was a statement that said that any new links will adhere to the technical agreements in the contract, and they will expire at the same time in the contract. You want all your links to expire, as far as the contract is concerned, at the same time. Otherwise, it's harder to manage and harder to negotiate a new contract when things are expiring at different times."
Lastly, if any hardware is needed, Henriques suggests negotiating new equipment purchases with your WAN service provider. They've already bought a bunch of gear for their own networks and have wrung the best prices out of the vendor, he says.
"We took the opportunity to put in that contract that we would have a very low cost - a wholesale price plus a percentage, which is much better than we were able to get from any other networking vendor," Henriques says. "We saved thousands of dollars with that."
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