A Smarter Way to Buy Bandwidth

The ISP market is about as orderly as a medieval bazaar. Fortunately, new route-control products may give corporate buyers an edge.

You might think that the market for Internet bandwidth would be a paragon of capitalist rationality. After all, isn’t bandwidth a commodity? And isn’t it all about moving bits from place to place? Precisely the kind of fluid, digital exchange that both engineers and economists would love for its efficiency and transparency?

Guess again. As it turns out, the market for bandwidth is practically medieval in its obscurity and irrationality. If your company needs to buy an Internet connection, you’re at the mercy of a bunch of Internet service providers whose marketing statements have little to do with reality and whose prices are all over the map. For example, a 45-megabit-per-second T-3 line can cost as little as $9,000 per month or as much as $18,000 per month, depending on whether you go through a low-cost, discount ISP like Teleglobe or an established, premium provider like AT&T.

Is there a difference in performance and reliability? Maybe, but such claims are hard to measure, especially when Internet performance can vary from second to second. No wonder many companies simply outsource their websites and let the hosting provider worry about the Internet connections — it’s more expensive than buying your own bandwidth, but it takes away the headaches and the risk.

However, there’s hope for companies in the market for bandwidth, whether they want to connect an in-house Web data center to the rest of the Internet or link corporate headquarters to a handful of branch offices via a wide area network. That hope comes in the form of Net route-control products from companies such as RouteScience and NetVmg, which is releasing version 2.0 of its flagship product, called Flow Control Platform, this week.

Essentially these products pick the best path for data packets to follow as they leave your data center. For route control to work, you need to have connections to multiple ISPs — a practice known as “multi-homing” that’s increasingly common in big corporate data centers. RouteScience and NetVmg devices perform constant evaluations of the performance delivered by your ISPs. They then direct outgoing data to whichever ISP connection is delivering the best performance at the best price. Your network manager can set up rules to specify exactly how that price/performance calculation gets done — for instance, you might want to use provider A unless performance drops below a certain level, in which case you’ll switch to the more expensive provider B. However the calculation is made, RouteScience and NetVmg’s products handle the switching in real time, adapting their routing choices based on each ISP’s relative performance at that moment. It’s like hiring someone to comparison shop for you, every second that your site is up.

The upshot? In a study released last week, RouteScience claimed that you can get better performance by purchasing bandwidth from two cheap “commodity” ISPs and linking them together with the RouteScience technology than you can by buying from a single premium provider. Alternatively, you can use RouteScience and NetVmg technology to negotiate better contracts with your ISPs, cut your costs, and make sure that they’re living up to the service levels they promised in your bandwidth contracts.

Granted, the research was done by RouteScience itself, so you might want to take the results with a grain of salt. But analysts are cautiously optimistic about the market for Net route-control products. According to Paul Bugala, a senior analyst at IDC, the market is still very small — less than $100 million annually — and has yet to be fully proven in the marketplace at large. But Bugala says route control can give big bandwidth buyers more leverage at the negotiating table with their ISPs. Charles Rutstein, a research director at Forrester, says route control can lower bandwidth costs by 20 to 40 percent. Route-control solutions run from $12,000 to $200,000, so if you’re paying more than $10,000 per month in bandwidth costs, this technology starts to make a lot of sense.

With luck, Net route control might also inject a bit of sense into the market for Internet bandwidth — and that would be good news for everyone.

Mea culpa: In my last column, I wrote that Red Hat’s new enterprise version of Linux is cheaper than Sun’s operating system, Solaris. In fact, a version of Solaris that works on computers with as many as 8 CPUs is available for free on Sun’s website. I regret the error.

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A Smarter Way to Buy Bandwidth