NetEqualizer News Blog

By Art Reisman

CTO – http://www.netequalizer.com

Bandwidth providers are organized to sell bandwidth. In the face of bandwidth congestion, their fall back position is always to sell more bandwidth, never to slow consumption. Would a crack dealer send their clients to a treatment program?

For example, I have had hundreds of encounters with people at bandwidth resellers; all of our exchanges have been courteous and upbeat, and yet a vendor relationship rarely develops. Whether they are executives, account managers, or front-line technicians, the only time they call us is as a last resort to save an account, and for several good reasons.

1) It is much easier, conceptually, to sell a bandwidth upgrade rather than a piece of equipment.

2) Bandwidth contracts bring recurring revenue.

3) Providers can lock in a bandwidth contract, investors like contracts that guarantee revenue.

4) There is very little overhead to maintain a leased bandwidth line once up and running.

5) And as I eluded to before, would a crack dealer send a client to rehab?

6) Commercial bandwidth infrastructure costs have come down in the last several years.

7) Bandwidth upgrades are very often the most viable and easiest path to relieve a congested Internet connection.

Bandwidth optimization companies exist because at some point customers realize they cannot outrun their consumption. Believe it or not, the limiting factor to Internet access speed is not always the pure cost of raw bandwidth, enterprise infrastructure can be the limiting factor. Switches, routers, cabling, access points and back-hauls all have a price tag to upgrade, and sometimes it is easier to scale back on frivolous consumption.

The ROI of optimization is something your provider may not want you know.

The next time you consider a bandwidth upgrade at the bequest of your provider, you might want to look into some simple ways to optimize your consumption. You may not be able to fully arrest your increased demand with an optimizer, but realistically you can slow growth rate from a typical unchecked 20 percent a year to a more manageable 5 percent a year. With an optimization solution in place, your doubling time for bandwidth demand can easily reduce down from about 3.5 years to 15 years, which translates to huge cost savings.

Note: Companies such as level 3 offer optimization solutions, but with all do respect, I doubt those business units are exciting stock holders with revenue. My guess is they are a break even proposition; however I’d be glad to eat crow if I am wrong, I am purely speculating.  Sometimes companies are able to sell adjunct services at a nice profit.

Related NY times op-ed on bandwidth addiction