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Download article:     SD-WAN: The Savings are in the Details

Download article:     Setting Goals for SD-WAN

From the Archive:  11/25/2005  Beware of "Woo and Screw" - Whether intentional or not, many carriers have a business practice which I refer to as "Woo and Screw."  In a market with ever declining prices and improving services, it is somewhat anachronistic that telecom carriers insist on long term contracts.  However, this practice is decidedly in the carriers' favor.  In most businesses, a long term high-volume relationship can earn you special consideration and more favorable pricing.  But in the carrier world, the rules are turned up side down.  The carriers woo prospective new customer with their latest and best services at the lowest prices in their history.  The carrier screw their long standing customers by failing to inform them about newer services and newly reduced prices.  In other words, a new customer gets royal treatment and an old customer ...not so much.

So how does the customers undo woo and screw?  The key is to always be a "new" customer.  Never let the carriers get comfortable.  Here are several suggested methods to achieve this:

• Keep contract durations short. In a competitive situation it is frequently possible to get a three-year price on a one or two-year agreement.  Let the carrier know you have no desire to dump them in 12 months, but you just want to remain flexible.
• Negotiate low commitment levels.  Having low volume or dollar commitments provides the flexibility  to redirect business to other carriers as you see fit.  For example, if one carrier serves your entire network, you may want flexibility to switch carriers in your home state if a new superior offering comes along from another vendor.  You may want to use a different carrier if you need to expand in an area where your present carrier is weak (e.g. China or India).  Having a low commitment level provides the flexibility to redirect chunks of business when necessary or beneficial.
• Don't use just one carrier.  Competition trumps volume for both pricing and service.  If you give all your business to one carrier, you will get a fat and contented carrier. If you split your business and let each carrier know about the split, it is possible to generate continuous competition in the form of aggressive pricing for incremental business, good account service between contract renewals, and good information flow about new service offerings.
• Negotiate market adjustment clauses in your contract if it is longer than one year.  To make this effective, you need to be plugged into a source of market pricing.

From the Archive:  11/28/2005  It's the latency - During the 1992 election Bill Clinton experienced a "light bulb" moment when he said to himself "it's the economy stupid" relative to voter satisfaction with their government.  When defining user satisfaction with network performance, it's the latency.*  More precisely, it's the consistency of the latency that determines user satisfaction.  Latency is largely driven by geographic distance.  So for applications like Oracle that are hosted in a single data center and then used around the world, users near the data center, say in New York City, are going to have a much faster user experience than users remote from the data center, say in London or Shanghai.  But that doesn't mean that users in London and Shanghai will complain about their experience being slower than users in NYC.  In most cases users don't know what application performance is like in other locations.  That means their benchmark reference is the best performance they ever see at their location.  Their pain threshold is crossed when performance is noticeably worse than the best case performance.  So if you are trying to manage network performance from a user's perspective, then you will focus on the consistency of latency. 

Ironically, nearly every network management vendor places primary emphasis on link utilization and little emphasis on latency.   For a number of indisputable technical reasons, link utilization is a crude tool for assessing network performance or capacity planning.  It is like using tin snips to perform open heart surgery.  A future article will address why link utilization is a useful but insufficient metric and will provide simple examples of how to measure the consistency of latency.

* Latency is also known as "ping time" or round trip network response time.

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