8

Results

CAPEX

The CAPEX cost was compared for

implementing these IP-VPNs on the

multiservice switch solution already

in place, as compared to deploying an

overlay network with edge/core routers.

In case of the multiservice solution,

the only costs that need to be added

are the line cards to connect the edge

devices (SGSN, GGSN, server farms)

and the software to implement the IP

VPNs (although forwarding is done in

hardware). No additional boxes need to

be added to the network and the same

management platform already in place

for the Layer 2 backbone can also used

for the IP VPN services.

In the overlay router scenario on the

other hand, additional edge and core

routers need to be added to the network

as well as additional line cards on the

Layer 2 backbone to connect these

routers. Also an additional network

management platform is needed to

manage these routers. All this results

in a significant increase in equipment

cost. On top of that comes the need for

expensive rack space for every additional

device required in the network and for

power and cooling resources.

The multiservice switch IP VPN

solution results in an initial CAPEX

cost-savings of more than 60%

compared with the router overlay

model

1

. Figure 3 shows a breakdown

of costs between these two solutions.

This is just comparing the cost of the

network elements, i.e. without any

additional network management

platform for the router solution.

Applying the same model to other

networks results in average CAPEX

cost-savings of between 50% and 65%,

depending on the type and the number

of access ports required per site.

OPEX

Operational costs play a very important

role in the total cost of ownership

of networks (up to 38% of the total

costs) and are likely to be the biggest

differentiator between technologies and

service providers.

In this business case, although not

quantified, additional savings will

be achieved in terms of spares-

management, training cost (single

platform for all Layer 2 and Layer 3

network services) and OPEX costs

(single network to manage, more

efficient troubleshooting, common

management and reporting tools for

all services).

There are also the often-forgotten,

hidden costs that can destroy a business

case and result in higher operational

risks and OPEX. Again the multiservice

solution as a common platform for all

services has an advantage compared

with a router based solution:

" Less risk for interworking problems

between different platforms, resulting

in improved service availability

" Better interworking Layer 2/Layer 3

traffic management and QoS

mechanisms

" Common end-to-end network

resiliency mechanisms, which will

increase service availability

" Richness of data collection tools and

OA&M systems allow for better SLA

enforcement and verification

Multiservice

5,000

4,000

3,000

2,000

1,000

0

K

Router-Overlay

Software

L2 backbone

Hardware

Figure 3: Comparison of multiservice versus overlay-based IP VPN solution

The multiservice switch

IP VPN solution results in

initial CAPEX cost-savings

of more than 60%

compared with the router

overlay model