APAC ripe for network-as-a-service

SINGAPORE–Companies worldwide are either over- or under-investing in network infrastructure, and the problem is especially pronounced in the Asia-Pacific region where networking needs are growing fast, said a Brocade executive who added a subscription-based model can address the issue.

In a Thursday briefing, K. P. Unnikrishnan, Brocade’s director of marketing for the Asia-Pacific region, said organizations’ current network acquisition patterns are not aligned with network demands. He explained that network infrastructure needs are difficult to predict and companies often end up over-investing in network which leads to under-utilization.

However, when user demand grows faster than the predicted rate, companies are left scrambling to purchase more network infrastructure, he noted.

For companies in the region, the need for network capacity is going up, he said, noting that a company’s networking needs can change overnight.

The company’s new Brocade Network Subscription (BNS) aims to solve this problem for organizations, he said, adding that a pay-per-use model is more aligned with network usage. It is targeted at managed service providers, government agencies, large enterprises and cloud or hosting providers.

Elaborating, Unnikrishnan said BNS allows companies to pay for networking capacity on a monthly basis, and increase or decrease the network capacity based on their needs. This frees up the customers’ capital expenditure (Capex) as they would not need to purchase equipment and the monthly subscription can be considered as an operational expenditure (Opex), he noted.

As part of the service, Brocade with the help of its channel partners will work out customers’ networking requirements, supply the equipment and provide the relevant support, he added.

APAC open to utility model
According to Unnikrishnan, the subscription-based approach is attractive to the region due to a mindset shift in organizations based here. A decade ago, a company would have preferred investing in on-premise network infrastructure; however, in the last five to six years, enterprises have warmed up to a utility model.

That said, Unnikrishnan noted that there remains challenges in pushing such a model. The main one is educating customers of the benefits of network-as-a-service, as some might think it “sounds too good to be true”, he said.

However, the executive expressed optimism that the subscription-model for network infrastructure will take off as software-as-a-service did. He noted that in the past, businesses dismissed hosting services but they now realize that such a service allows them to “not worry about what’s behind the curtains”.

Announced this week at VMworld 2011, BNS is already available in the United States and Hong Kong and will launch in the region in the next couple of weeks, said Unnikrishnan.

BNS customers, he added, need to commit at least US$500,000 with capacity upgrades starting from US$20,000. Users also have to observe a 60-day notice period to upgrade or downgrade their capacity as well as to terminate the service.