March 19, 2001, 12:50 PM — IP-based (Internet protocol) systems provider CoSine Communications Inc. has launched a network-edge platform that provides label switching and IP security encryption at the service providers' end, eliminating the need for customers to build security infrastructure at their own premises.
This represents a paradigm shift in IP VPN (virtual private network) delivery that could help service providers save costs and reverse the current downturn in profits, said Matthew Young, CoSine's vice president for Asia-Pacific.
Speaking at the opening of the company's Singapore office recently, Young said basic Internet access and IP transport have become commodites due to increased competition, and therefore could no longer sustain profitability.
At the same time, service providers find themselves having to work around the constraints of legacy infrastructure. On top of this is the need to respond to customers' ever-changing requirements.
The CoSine IP Service Delivery Platform, which is based on an open architecture, helps service providers address these challenges by accelerating the time-to-market of IP VPN services such as extranets and intranets, firewalls, intrusion detection, virus protection and network address translation, said Young.
It does these without disrupting their existing network infrastructure or adding more equipment to their customers' site. The platform integrates with existing frame relay, ATM (Asynchronous Transfer Mode) and leased-line equipment.
Catherine Van Aken, business development manager for Asia-Pacific, said the CoSine IP service delivery platform reduces operational and maintenance costs because there is little or no need for installation and maintenance of equipment as is required by CPE-based (customer premises equipment) implementations.
She estimated that CoSine's network-based solution saves service providers more than 50 percent on capital costs and increases return on investment due to fast implementation. "Since service is managed real time, it can be turned on in a minute," she explained.
However, while such network-based solutions promise initial investment cost savings and increased returns, service providers themselves have to be creative to enjoy the benefits, said Gary Hong, an analyst from the International Data Corporation (IDC).
"It is up to the service providers to plan and lay out their business models and think how they are going to offer and sell the value-add features to sustain profitability," Hong said.
He also foresees that earlier adopters of this solution are the global service providers like UUNet and MCI, simply because they have had experience implementing VPNs globally. Other providers of network-based IP VPN present in the Asia-Pacific region are Lucent, Nortel and Ennovate Networks.