AN UNCERTAIN CLIMATE                             These pressures are prompting IT leaders      ELIMINATE UNCERTAINTYThe ec...
network subscription can address “cloud-            tant for government agencies at all levels,        customer,” Kirk say...
The latter two levels have traditionally re-     Network infrastructure “on a utility basis”         CONCLUSIONquired sign...
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GDS International - Next - Generation - Telecommunications - Summit - Europe - 7


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Brocade Network Subscription - CIO World Whitepaper Network By Subscription A Flexible, Scalable Opt

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GDS International - Next - Generation - Telecommunications - Summit - Europe - 7

  1. 1. NETWORK BY SUBSCRIPTION: A FLEXIBLE, SCALABLE OPTION FOR TODAY’S FLUID MARKETSEXECUTIVE SUMMARYPurchasing or leasing network infrastructure in today’s technologicallyand economically uncertain climate may be too inflexible, too riskyand too expensive for many IT departments. But there is a moreviable option: network subscription. For a monthly fee, customerscan acquire network capacity through a long-term, open-endedacquisition model that allows them to increase or decrease capacitywith 30 to 60 days notice.Much like a utility, network subscription allows customers to pay onlyfor what they use, eliminate the risk of their own equipment becomingobsolete, and keep capital expenditures off their balance sheets.The result is an agile, scalable, and easy to refresh network infrastructure. “If you’re in a fluid, dynamic environment, a network subscription is absolutely of interest. We see a big future for it.” —Ron Dobes, Executive Director, Managed Connectivity Services for CSC1 WHITE PAPER: NETWORK BY SUBSCRIPTION
  2. 2. AN UNCERTAIN CLIMATE These pressures are prompting IT leaders ELIMINATE UNCERTAINTYThe economy may be recovering, but there to move to highly virtualized, services- AND RISKis still high unemployment and market on-demand networks enabled through Network infrastructure as a monthlyuncertainty. For IT leaders in government cloud delivery models. And while there is subscription is designed specifically toagencies, that means severe constraints enormous potential in the cloud, there are address these issues. It may not alwayson capital budgets. And though the con- also concerns. be cheaper than purchase or lease in thestraints are less severe for other business- short run, but its advantages can lead toes, there is still pressure to limit spending THE TRADITIONAL RESPONSE: profit and/or savings that easily outweighand leverage efficiencies. HEADACHES REMAIN the cost differential. Traditional network capacity manage-Meanwhile, the demands on IT to do more ment—the “stair-step” model of overbuild- In today’s volatile market, rapid responseand do it faster are growing: ing infrastructure beyond expected peaks, it is a competitive necessity. A monthly and then waiting for demand to surpass it network subscription can provide it—a Use of social networking, collabora- consistently before repeating the process— customer can expand, contract and/or tion software and handheld mobile has become risky and expensive. An en- refresh capacity or technology on 30 to 60 devices is expected to increase. terprise with peak demand for one month days notice with no penalty. It’s a network Younger workers especially are used each year has overcapacity sitting unused acquisition model with the same flexibility to collaborating on multiple network the rest of the time, essentially tying up as a cloud-based business model. access points. money that could be spent elsewhere. Online retailing is driving customers to That model is the latest option from Bro- the cloud, creating volatile peaks and But if an IT executive underestimates cade, an industry leader in providing reli- valleys in demand, and requiring IT to demand and cannot scale up quickly able, high-performance network solutions. respond quickly with varying levels of because of capital constraints, productiv- Jody Kirk, Senior Director, Corporate De- capacity. ity and customers may be lost. Finally, the velopment for Brocade, says the capacity IT is becoming a core element of pace of technology makes the status quo planning process “used to be linear. It was business strategy. This makes betting method of waiting three to seven years to easier to predict (growth). That’s changing capital outlay on specific technology refresh infrastructure obsolete. As most as CIOs are trying to leverage the cloud to and vendors increasingly risky—ob- enterprises and providers have learned, address those spikes.” solescence can make an enterprise customers tend not to be patient when less competitive. new technology is available. Apple is a classic example of how a Network Infrastructure Acquisition Network Subscription Over-provisioning Lost Productivity Traditional Network Capacity Management Purchase cycle Actual Demand Time2 WHITE PAPER: NETWORK BY SUBSCRIPTION
  3. 3. network subscription can address “cloud- tant for government agencies at all levels, customer,” Kirk says, “and there is a hugebursting” demand peaks, says Kirk. “On where IT capital budgets have been slashed infrastructure investment required that putsDecember 25, the demand for iTunes goes due to low tax collections, and high govern- them in the hole on the day they start thatthrough the roof,” he explains, “and sitting ment outlays. With network subscription, contract. Normally, they don’t break evenbehind that Web application are transaction- they can expand services and stay current until year three. This allows them to scaleal databases. If you’re Apple, do you want with technology without capital outlay. up and profit more quickly.”to build for December 25, or do you want to “This is good especially in cash-strappedleverage third-party resources at a premium states like Illinois and California,” says Lisa ACQUISITION ALTERNATIVESto satisfy that demand?” The premium, he Paquette-Nelson, Director of Finance for The choice of network acquisition model—notes, costs much less than having that kind Brocade Capital Solutions. purchase, lease or subscription—dependsof network infrastructure in place all year. on the unique needs of the organization. A purchase brings an asset to an organiza-A network subscription can also address While both a lease tion that is intended to add value duringthe risk that a network infrastructure won’t and a subscription are its useful life. Unlike a lease, it involves nokeep up with future technology. Robert documentation fees.Grasby, Senior Manager, Solutions Market- an operating, rathering for Brocade notes that a subscription than a capital expense, A lease generally includes origination feesmodel allows an IT manager to “pick up on as well as penalties for early termination.(new technology) very quickly for a slight network subscription Purchase and lease models may also bechange in the monthly fee.” This is particu- offers greater flexibil- subject to debt covenants and are depreci-larly important as the path to the public ity, since there is no ated annually. A network subscriptioncloud evolves. “It gives them the flexibility involves no documentation fees, no long-to align with the nirvana they are seeking.” long-term payment term obligation, and the monthly paymentGrasby says. In short, it helps to smooth, commitment and the is for actual use.and make affordable, the transition to thevirtualized world. monthly payment is And while both a lease and a subscrip- for actual, rather than tion are an operating, rather than aAdditionally, subscription allows IT to focus expected, use. capital expense, network subscriptionon the core objective of the enterprise. “IT offers greater flexibility, since there is noorganizations are trying to move away from long-term payment commitment and thethe technology hat to align with business Network subscription benefits enterprises monthly payment is for actual, rather thanobjectives,” Grasby says. “This allows them and service providers as well, by giving expected, do that.” them capital flexibility. The large upfront costs of refreshing or expanding infra- Brocade Network Subscription is slightlyCOST CONTROL AND BEYOND structure can be deployed elsewhere. And more expensive than a lease, but it canRespondents to CIO magazine’s 2011 instead of paying to build and maintain ultimately yield efficiencies and profit. KirkState of the CIO survey list overall operating infrastructure, network subscription cus- says some clients use all three models,cost reductions among the top business tomers pays only for what they use. It’s not depending on their needs in specific areas.accomplishments their IT organizations just pay-as-you-go—it’s pay-as-you-grow.will achieve in the coming year. Top-line CASE STUDY: CSCrevenue growth is the primary focus of IT This means government agencies, enter- Falls Church, VA-based CSC is a globalinvestments for more CIOs than a year prises, and service providers can scale their provider of technology-enabled businessago, while fewer IT leaders plan to focus on business instead of their infrastructure. It solutions. Since its founding more thanlowering business operations costs. can be particularly attractive to network ser- 50 years ago, it has grown to 93,000 vice providers, whose customers’ business employees in 90 countries. CSC typicallyWhat does this sustained trend of shifting infrastructure demands may change rapidly offers customers three levels of service:investments toward business goals mean through seasonal fluctuations, or because at the first level, the customer owns thein the context of networking services? It of business activities such as cloud-based infrastructure and CSC manages it; at themeans that while IT leaders are looking for software development. second level, CSC upgrades the networkways to drive revenue, controlling costs is to new architecture; at the third level, CSCstill a prerequisite. This is particularly impor- “A service is really what they’re selling to the builds a network from the ground up.3 WHITE PAPER: NETWORK BY SUBSCRIPTION
  4. 4. The latter two levels have traditionally re- Network infrastructure “on a utility basis” CONCLUSIONquired significant upfront capital. Ron Dobes, allows enterprise leaders to focus on the Brocade Network Subscription is a newExecutive Director, Managed Connectivity core business, Dobes says. “The average acquisition model aimed at today’s environ-Services for CSC, says the legacy method of CEO doesn’t care that much about the ment of economic and technological uncer-capital investment to build network infra- network. But he or she does care about tainty. With it, customers can increase orstructure for anticipated peak loads “was whether the business application is run- decrease networking capacity without up-sustainable until about two years ago.” ning correctly, and whether the business is front capital costs. Brocade Network Sub- getting the optimum productivity from its scription removes the risks and obligationsBut the volatility of the market has application portfolio.” of a long-term lease, giving an organizationchanged that. “The legacy method was the flexibility to respond quickly to changesgood at anticipating growth in the business, Done right, network infrastructure is like the in demand without financial penalty, and tobut not shrinkage,” Dobes says. “If business infrastructure behind a light switch. “You align costs with revenues.falls off, or perhaps a company sells off a don’t know it’s there and I don’t want youdivision, then an enterprise ends up with to know it’s there. But if the light doesn’t It also lowers the risk of technological obso-stranded capital.” come on, you suddenly notice it,” Dobes lescence. The network infrastructure behind says, adding that network subscription any operation is critical. But building it andNeither the purchase nor lease model is makes unwanted notice of the infrastruc- keeping it up to date it should not be the pri-elastic enough to respond quickly to those ture less likely from a financial perspective. mary focus of the IT division of an enterprisefluctuations, he explains. “We’re very or service provider. With Brocade Networkexcited about this (network subscription), “If you know you’re going to buy that switch Subscription, it doesn’t have to be.because now you can scale up, down, or and use it until it fails, then this will have nosideways, and neither CSC nor the cus- attractiveness whatever. But if you’re in atomers have to worry about capital costs. fluid, dynamic environment, this is absolute- To learn more, visitThat is what has been lacking.” ly of interest. We see a big future for it.” About Brocade Brocade provides reliable, high-performance network solutions that help the world’s leading organizations transition smoothly to a virtualized world where applications and information reside anywhere. The company is extending its data center expertise across the entire network with future-proofed solutions built for consolidation, network conver- gence, virtualization and cloud computing. For more information about Brocade products and solutions, visit WHITE PAPER: NETWORK BY SUBSCRIPTION