From Bring-your-Own-Bottle to Bring-your-own-Broadband
Oct 21, 2016
Have you heard about the corkage fee in some restaurants? Instead of trying to have every single wine on their stock, some restaurants choose to allow their customers to bring their own bottle, and then charge to serve it.
We’ve all read so many times the successful stories of companies such as Uber or Airbnb that make their business out of intermediating on the sale of other’s assets. In the same way that Uber has no cars or Airbnb has no apartments, it is possible for Connectivity Service Providers to make a business without its own network.
With SD-WAN, enterprises can connect their branch offices using a combination of multiple WAN technologies, including MPLS IPVPN, DSL/FTTX, 4G or Satellite to mention some. Currently it is relatively easy for enterprises to find broadband connectivity for any of their branches, but the complexity for them, relies on the management of the multiple options.
Service Providers should be looking into managed SD-WAN as an opportunity to sell just a service in areas where they can’t provide the connectivity.
Let’s take a large global enterprise with 20 regional headquarters and 2,000 regional retail locations. Service Providers have successfully provided IP VPN to the headquarters, but they failed in trying to connect the regional sites due to the high costs for the low value provided. Traditionally, those smaller branches have been connected using IPSEC over broadband, providing some basic connectivity, but providing a very different experience.
With SD-WAN, enterprises are able to seamlessly connect all branches of any size using MPLS when the QoS is required or broadband where cost savings are important. They can extend VLAN/VPNs to each location or even additional advanced services.
Bring your own broadband (BYOB) Service
Service Providers should extend their MPLS IPVPN service with SD-WAN, bundled with their own broadband services, but not limited to it. SD-WAN allow Service providers to create a business by intermediating on other’s Broadband services, where the value provided to their customers is the simplified management and seamless connectivity. Even more, some Service Providers will aggressively compete in this space without even having the IPVPN Service.
Some restaurants are not afraid of doing things differently. Some sommeliers might not be very excited to see their value moving away, but the restaurant owner might prefer it this way. Service Providers shouldn’t be afraid of serving customers even when connectivity is not involved, if this helps to keep the customer happy.
In the same way restaurants provide a table and the service but have a corkage fee to serve your bottle, Service Providers can provide a CPE and charge you for the SD-WAN service over your own broadband connections. The question now is how much can an SP charge for this service?