Users are not flocking to converged services
Combining voice and data traffic over the same WAN connection is in theory a good idea. But if the practice were simple, everyone would be doing it.
Integrated access services that support voice and data on one dedicated line are more widely available today than 18 months ago, but only two service providers have national offerings. Sprint was first, with its Integrated On-Demand Network (ION) service announced in 1998, and AT&T followed several months later with its Integrated Network Connect Service (INCS).
Neither has proven all that popular.
Sprint ION and AT&T INCS are similar in that each includes a carrier-owned customer premises device that connects to a user's LAN and voice switch. The device, a Cisco router in both cases, sends that traffic over a dedicated WAN connection. Both companies claim customers can reduce costs by 3% to 20% because users are reducing the number of dedicated lines they need. But that's where the similarities end.
INCS customers access AT&T's ATM network via frame relay connections. ION customers are connecting via ATM, but Sprint is also offering customers alternative access services whereas AT&T is not. Sprint offers multiple flavors of ION that support DSL for small and remote office workers who may not need 1.544M bit/sec worth of bandwidth. AT&T says it's developing DSL access to INCS.
"We will have DSL in 90 to 100 markets by the end of next year," says Greg Gordon, director of enterprise WAN marketing at Sprint. The carrier now offers DSL access in 12 markets.
Sprint is ahead of AT&T from a DSL perspective, but AT&T also has a leg up on Sprint because INCS customers are using dynamic bandwidth allocation. Both services let customers dedicate a specific amount of bandwidth to voice traffic and the remainder to data traffic. INCS lets customers automatically burst data traffic, borrowing voice bandwidth if it is not being used. AT&T is deploying Cisco 3810v3 devices at customer sites. The device includes Cisco software that supports dynamic bandwidth allocation that's not available in the standard off-the-shelf 3810, says Lisa Pierce, an analyst with Giga Information Group.
Sprint ION does not offer users dynamic bandwidth allocation although it was one of the benefits the company cited when launching its service.
"Today, users set up a [permanent virtual circuit] for voice service and they can change that, but it's not set up so that data can burst into that voice bandwidth," Gordon says.
Fully managed integrated access is not the only attraction users find in these services.
Steelcase, an office furniture manufacturer, recently inked a deal with AT&T to have INCS deployed at all 22 of the company's regional offices and four of its manufacturing sites. "We have a national frame relay network, and we've been struggling to get more bandwidth to our regional offices in a cost-effective way," says Bob Karestakos, director of information services at the Grand Rapids, Mich., company.
Karestakos estimates that Steelcase will save $7,000 to $10,000 per month when INCS is deployed to all its locations. "The ability to converge our voice and data was just an additional benefit," Karestakos says. Each regional office is in line for a dedicated T-1. The company's manufacturing sites have higher bandwidth needs and are in line for two multiplexed T-1s. Steelcase can upgrade its manufacturing sites to up to eight T-1s, which offers considerable flexibility, he says.
Steelcase, a longtime AT&T frame relay customer, spoke with Sprint about ION before making its final decision, but Karestakos says ION wasn't available in all the company's locations six months ago when it started shopping for a new service.
ION's availability is an issue, Giga's Pierce says, noting there are 17 nodes that support ION, but that's far too few. "They should have doubled that number by now," she says. AT&T does not disclose how many nodes support its service, so it's difficult to compare the two on this score, Pierce adds.
AT&T and Sprint, the largest and third-largest long-distance service providers, have distinct service offerings to integrate voice and data. But where does the second-largest provider stand? WorldCom has an integrated access story, but the company is without a specific managed integrated access service. WorldCom launched its On-Net marketing plan soon after Sprint announced ION. WorldCom offers voice over frame relay and plans to launch voice over DSL in early 2001, but the company does not have a service that directly compares with ION or INCS.
"WorldCom will be damaged by not offering a specific integrated access service," Pierce says. "Customers are interested in these services, and when users are shopping around they need to see an integrated offering in that carrier's service portfolio."
"On-Net is an overarching concept or strategy," says Jim DeMerlis, vice president of product marketing at WorldCom. "We're looking at integrated access from the perspective of enabling technology. Users will be able to access frame relay, ATM, private line or voice services using DSL and [multichannel multimode distribution service]," he says. "We're trying not to be tied to [customer premises equipment]."
WorldCom's approach may prove to be the right one. Sprint ION hasn't generated much revenue even with 40 customers under its belt. ION revenue for the first quarter of this year totaled only $1 million, with operating expenses of $137 million.
Users have not adopted integrated access services as quickly as AT&T and Sprint would like, but that's because the carriers have been unclear about the services in terms of guarantees, additional features and capabilities, says Joanna Makris, a program manager at Boston consulting firm The Yankee Group.
Here are a few items users should ask their carrier about before signing on the dotted line. There are no standard service-level agreements (SLA) from the carriers, so users need to be sure they are signing contracts with compensatory SLAs, Giga's Pierce says. Users should also request switch redundancy.
In addition, users who sign these big contracts with AT&T and Sprint because they take comfort from knowing big carriers are managing the network should make sure the job isn't being handed off to an unknown third party.