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Sun 19 Oct 2008 04:00 AM

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At your service

Hosted services are fast gaining traction in the region, especially ones connected to bandwidth management. Sean Robson investigates what vendors offer enterprises.

Hosted services are fast gaining traction in the region, especially ones connected to bandwidth management. Sean Robson investigates what vendors offer enterprises.

Bandwidth is a hot topic in the Middle East and its only getting hotter as enterprises scrap for every available bit in an often prohibitively expensive market.

The amount of effort and expertise required when it comes to managing bandwidth has seen the advent of hosted services, but there remains confusion on what exactly bandwidth management entails for enterprises.

There is no doubt in my mind that, while the market for bandwith management is nascent at the moment, it will take off in a big way over the next 12 to 18 months.

"Bandwidth management refers to the process of optimising the bandwidth that carries traffic over networks. Network managers control communications by allowing high-priority traffic to utilise more bandwidth than something given a lower priority status. Business-critical applications, including e-commerce transactions, are dependent upon successful bandwidth management. Bandwidth management, and by extension, hosted services are both economical and practical," explains Farid Faraidooni, executive vice president commercial at UAE telecom provider, Du.

"It is an expanding market, corporate companies and government institutions have traditionally kept their operations in-house. However, we are seeing more requirements for not just managed network services but generically managed infrastructure services.

It is in part a result of the challenges associated with the shortage of skilled staff locally," says Jinna Bains, country manager of BT Middle East.

"There is no doubt in my mind that while the market for this service is nascent at the moment, it will take off in a big way over the next 12 to 18 months. An important area to look at when talking about the potential of this space is the drivers behind it. First, there is the global nature of Middle Eastern businesses, which require bandwidth on a constant basis. The second key driver is the applications that enterprises are looking at to power their organisational productivity, which in turn drives the need for increased bandwidth," notes Guru Prasad, general manager for networking at FVC.

Faraidooni agrees, pointing to the rise in applications that enterprises are having to implement across their networks.

"Apart from the sheer number of new users being added to networks on an almost daily basis, there is the emergence of all sorts of applications ranging from e-commerce applications through to streaming media applications, and peer-to-peer websites," Faraidooni says. The provider advantage

As with all services and solutions, the vendors are quick to tout the benefits of hosted bandwidth management, and although Prasad is no different he does point out the flipside.

"Well, the quality of service is obviously very good because you are basically leveraging the investments that a provider has made across the world. Following that is the reach and availability of end-to-end connectivity, as you do not have to worry about having an office in a specific location that can deliver your applications to that part of the world. The downside is that it is not an unsubstantial cost, and needs to be weighed against the benefits and the relative needs of the enterprise," Prasad says.

Du believes that hosted bandwidth management has a very high potential for growth.

"Put in simple terms, we can help organisations stay more competitive and assist them in achieving their business goals. In terms of specifics, our solutions reduce complexity, overheads and costs for these organisations, while enhancing performance. The organisation is able to benefit from working with a dedicated provider and so typically there is an improvement in service quality and functionality with the deployment and knowledge of many years of experience," notes Bains.

BT works with its customers to identify the critical activities that underline their businesses, and subsequently delivers the networked IT services to support these activities.

"Companies can use their limited resources to focus on more strategic activities, while enjoying the security of knowing the operational management of their infrastructure is dealt with on their behalf, in particular if they team up with a global partner. They can rely on the same quality of service, and on one single interface in different site locations," explains Bains.

Roadblocks

Although the benefits being touted seem to make adoption of the services a no-brainer there has been a glaring lack of enthusiasm from end-users.

Like most other Middle East end-users, the Roads and Transport Authority (RTA) in Dubai has not really bought into the idea of hosted bandwidth services and prefers to take care of things internally.

"At this stage we host our own bandwidth. We use mostly Packeteer to manage it. We find that taking care of our own business gives us greater control," says Indranil Guha, IT infrastructure manager at the RTA in Dubai.For end-users, whether hosting their own bandwidth or outsourcing the service, cost remains an issue. "We spend a big part of our budget on bandwidth, in the neighborhood of US$20,000 per month for the two leased lines in our offices," says Bassem Aboukhater, IT manager at Leo Burnett Middle East.

It's that cost that is proving most challenging for Aboukhater as he compares his expenses to sister agencies in Europe that pay a paltry $2,000 a month for a 40Mbyte/sec link.

"We are finding the emergence of unknown applications a challenge. They seem to be popping up all over our sites. This changes our traffic patterns and makes management difficult," says Guha.

"In my experience, the technical challenges faced in this region are not unique but rather universally applicable. In today's enterprise, where users are highly distributed and applications are highly centralised, the wide area network (WAN) plays a strategically important role in connecting users and applications. Unfortunately, this architecture also creates an enormous amount of traffic over relatively narrow WAN links," warns Du's Fairadooni.

"To address these issues and maximise both WAN and business performance, consider deployment of bandwidth management capabilities that focus on higher level session and application-layer communications," he continues.

Fairadooni advises that these capabilities should be combined with a broad set of acceleration, security, and policy control capabilities that are well integrated into an appliance that optimises application delivery across the WAN.

"One of the obstacles to adoption of managed services is the fact that many providers out there do not have the necessary domain expertise. That has a way of putting enterprises off. However, the two largest inhibitors towards adoption of managed services are a lack of flexibility in delivery and loss of control. A managed service is based on a replicable model that creates efficiencies. However, many companies in the region, because of their current expansion phase, demand a high level of flexibility. This may create a gap between reality and requirements, which leads to unmanaged client expectations," says Bains.

He recommends that in order to manage this gap, a number of criteria should be met. This includes having a strong governance model to manage expectations, engaging only with providers that a company trusts, and ensuring that both sides are fully satisfied with the other's credentials.

FVC'S Prasad not only sees costs as a major obstacle on the road to widespread adoption, but points to that old bug bear of the Middle East, regulation. "I think regulation is needed to bring about some sort of sanity in terms of allowing new operators in the region to provide bandwidth services. I believe that regulation is indeed the biggest challenge to this market, and as we open up the market we will see more and more providers come into the region and actually provide a high level of quality and reliable service to enterprises," he says.

In terms of addressing the issue of cost, Prasad explains that although initially expenditure may prove high wider adoption will see costs being dramatically reduced. The future is now

Due to the relative newness of the services in the region, and the lower adoption levels among end-users, vendors are hesitant to declare just how profitable their solutions are proving.

"Clearly as these services become more commoditised profitability can be a concern. However, at BT we tackle this head on by innovating and helping our customers move further up the services value chain," says Bains.

"FVC is very bullish about the hosted bandwidth market and we believe it is a strategy that will fall in place if you look at the demand for applications as well as cloud computing. If you look at how the adoption of cloud computing and rich media services continues to grow in this market, then the need for hosted management is going to grow exponentially," says Prasad.

 When it comes to the future of hosted bandwidth management in the region the agreement is resoundingly positive. Vendors and end-users alike believe that it is a service that has the potential to deliver enormous value and will continue to grow for many years to come.

"While we have no immediate plans to use these services in the near future, I do see hosted services increasingly growing in prominence throughout the region," says Guha.

"We at Du believe that hosted bandwidth management has a very high potential for growth globally, as well as in this region, It is why we plan to offer these services in the very near future," says Fairadooni.

"There is a two-fold growth occurring. As institutions accept the benefits of a managed infrastructure, service growth in this market will continue. In parallel, a second growth wave will occur in adjacent areas beyond infrastructure into the applications layer. I also believe the lack of resources will push more enterprises towards the need for managed solutions," affirms Fairadooni.

Hosted bandwidth management is definitely a service that has a role to play in the Middle East. Although the market remains quite nascent at the moment it is only a matter of time before the circumstances create the ideal situation in which widespread adoption takes off.

Obstacles to adoption

Cost:The initial outlay is not justifiable for many organisations that do not require massive amounts of bandwidth.

Regulation:The Middle East market for services remains tightly regulated. This results in the incumbents stagnating in terms of cost and service levels.

New applications:There is a constant stream of new applications popping up in networks, which disrupts traffic and makes management difficult.

Technical issues:The relatively narrow nature of WAN links can result in a bottleneck of bandwidth traffic, and this can happen to the provider as much as the customer.

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