Networking with Resilience
Virtual Private Networks based on Multi-Protocol Label Switching are all the rage among a growing tribe of companies
By Sanjay Gupta
Over the past few years, most Indian enterprises have been moving away from traditional leased lines for connecting their offices. Instead, they are subscribing to Multi-Protocol Label Switching (MPLS)-based Virtual Private Networks provided by the likes of BSNL, Tulip, Sify and other telecom services providers. And those who haven’t done so already are planning their move right now.
Leased lines, which used to be synonymous with high bandwidth but came at steep prices, are fast giving way to MPLS-enabled connectivity options to companies that can now not only control their communication costs but also provide for rapid – and often unpredictable – growth in their operations.
According to research firm Frost & Sullivan, the Indian MPLS VPN services market will grow from Rs 974 crore in 2007-08 to Rs 2,891 crore in 2014-15 – a CAGR of about 17 percent. In contrast, the domestic leased line market will grow at a much lower CAGR of 10.8 percent to reach Rs 1,908 crore in 2014-15 (from Rs 930 crore in 2007-08). “Most of MPLS growth is happening because the traditional domestic leased line business was expensive. With MPLS VPNs, enterprises have a cost-effective alternative that is scalable and can also provide security,” says Sourabh Kaushal, Principal Consultant (ICT Practice), South Asia & Middle East, Frost & Sullivan.
Connectivity drivers
So, what is driving this rapid shift to MPLS VPNs and how are enterprises using their newly strung networks?
“Three key applications are responsible for much of the growth today: ERP, core banking, and CRM,” says Deepinder Singh Bedi, Director – International Business and Marketing, Tulip Telecom, one of the leading and most aggressive service providers in this arena. According to Bedi, other applications that will be key for the growth of MPLS VPNs are messaging, SCM, and video/voice collaboration.
As companies get ready to roll out their key business applications country-wide, a VPN becomes a must-have to accommodate a growing geographical footprint. And MPLS is the technology of choice for doing so. This also reduces the setup and management headaches for CIOs and IT executives, because essentially it is the service providers who install the requisite infrastructure (routers and other equipment) and configure their networks for MPLS. Once the network is MPLS-enabled, they can offer VPN and other associated services such as managed services, hosting, co-location, etc. to as many companies as their capacity would permit.
Experts say that till a couple of years ago, companies used to hire a network integrator to set up VPNs on their own using expensive leased lines for point-to-point connectivity between different locations. Such networks, however, were not resilient enough to meet the dynamically growing requirements of companies. Besides, in case a physical link broke or got damaged, no “protection” of traffic was provided. Then later on, many organizations moved to what’s called “tunneled” VPNs set up using the Internet but secured through encryption. However, all these options were either expensive, complex to manage or marred with congestion in the public Internet.
MPLS-based VPNs emerged to solve most of the problems by offering automatic re-routing capability, better Quality of Service (QoS) and enhanced security and reliability.
“MPLS in its initial stages was deployed as just another forwarding mechanism over and above IP, but today with more applications like Traffic Engineering, Pseudo-wire VPNs, Inter-provider MPLS VPNs, Carrier supporting Carrier, etc., it has become the protocol of choice in the core [of the network]. In India, there is adoption of MPLS in most of the carrier networks,” says PK Saji, Senior Vice President of Global Infrastructure Operations at Sify Technologies, another key player in the MPLS space.
Taking the pain of setting up complex VPNs on their own away from companies across all sectors, firms such as Tulip and Sify are offering MPLS VPN services for a contracted fee, usually measured over a year and monitored minutely with a clearly defined Service Level Agreement (SLA). The level of responsiveness, availability parameters of the network, preferential hierarchy of applications, etc. are all put down in SLAs and the VPN service is priced according to these specifications, besides the sheer span of the network and raw bandwidth usage. This outsourced arrangement puts much more predictability, flexibility and ease in the hands of user companies’ technology executives – who can now focus more on building and rolling out business applications on these VPNs.
If anything, MPLS VPNs are enabling organizations to take a relook at their connectivity options and go for what best meets their needs in a more cost-effective yet reliable way. For instance, Punjab National Bank (PNB), one of the largest public sector banks in India, is currently in the process of implementing an MPLS VPN to cover what it calls “all its 106 network aggregation points” across the country. Says RIS Sidhu, General Manager of the bank’s Information Technology Division, “The [MPLS VPN] links will connect these aggregation points to our data center in Delhi and our disaster recovery site at Belapur, Mumbai. The links will be from two different service providers and there will be load sharing between these two links.”
The primary objectives for deciding on an MPLS VPN, according to Sidhu, include high uptime requirements, improving efficiency and monitoring of the existing links, managing the links, procuring and commissioning new links, and network consulting for new hardware and connectivity. Given the critical nature of connectivity to an organization such as a sprawling bank, the benefits, though intangible, are difficult to argue with for their positive business impact: high availability, satisfactory customer service available when required, and better management of the network.
At the moment, Punjab National Bank is carrying out pilot testing of the network and will be rolling out its core banking solution, HR management system, email and other applications on the VPN. To ensure that all the applications run in a secure environment, the bank is using IPSec and has also installed firewalls at “strategic entry points,” says Sidhu. Besides, the bank will be using links from two different service providers and the network load will be shared between the two.
While sectors such as banks and manufacturing may be leading the Indian market for MPLS VPN adoption, there’s huge potential yet to be tapped in segments such as retail and BPO. “In advanced markets like the US, every retail store is connected, but this is still to happen in India,” says Bedi of Tulip. For instance, he says, Indian Oil, which has connected about 30 to 40 branch offices, now wants to bring over 16,000 petrol pumps under the MPLS VPN fold.
Challenges for the future
According to Bedi, most of the European service providers have switched over from TDM to MPLS and Asia will follow suit. He says that the biggest challenge for India will be last-mile connectivity – an area in which Tulip has been ramping up its presence through its wireless expertise using a mix of wireless options, including Wi-Fi and WiMax. Currently present in 1,200 cities, Tulip’s ambitious goal is to extend coverage to every village in India by the end of 2009. Other service providers have similar plans for growth to meet the bulging demand from large corporates as well as SMBs.
On another front, some providers feel that the existing networks need to be tweaked to a greater extent to realize the full benefits from MPLS. Says Saji of Sify, “In India, there is adoption of MPLS in most of the carrier networks; however, it is not complete to an extent that can help deploy all its applications.” Another challenge is the dearth of knowledge and expertise on this technology in the Indian market, something that is causing concern amongst many enterprises about the related configuration or management issues. Sidhu of PNB cites configuration issues at the service provider’s end that the bank had to overcome in its pilot, though these were resolved as the pilot progressed.
Nevertheless, most of the issues and challenges are likely to prove minor irritants rather than major impediments to the wider adoption of MPLS VPNs. As more and more organizations realize the multiple benefits of setting up a converged network, the adoption curve for this technology will only look upward.
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