The MPLS WG Archive

["Kavi, Prabhu" <prabhu_kavi@tenornetworks.com>]

Geoff,

Your generalization about "loss making Internet Services" is
foolish.  

Several years ago, somebody forgot to tell UUNET that they
were selling loss making Internet services, and they hit
break-even during a period of explosive growth (very hard to
do).  I think it is fair to say they are quite profitable 
for Worldcom today.

I also know for a fact that several other large ISPs are 
profitable as well, but they are part of larger organizations 
that do not publicly break out the P+L of each division.

No doubt, ISPs could do better by offering a range of services,
some of which promise higher service quality.  But if a service
provider is going to start providing higher revenue services
today, why in the world would they want to do it over ATM 
switches?

Prabhu



> -----Original Message-----
> From: Geoff Bennett [mailto:geoff.bennett@marconi.com]
> Sent: Thursday, April 19, 2001 12:20 PM
> To: Donkin, Richard; MP LS; mpls-ops@mplsrc.com; mpls@UU.NET
> Subject: RE: ATM-LSR do they use OSPF/IS-IS or PNNI??
> 
> 
> Hi Richard,
> Please read my post carefully.  Internet services are 
> generally intended to
> mean "best effort".  In contrast VPN services are supposed to 
> carry some
> kind of added value.  In other words, I fully accept that IP 
> VPNs should
> make more money than a basic Internet service.
> 
> But as I understand it, the added value from IP VPNs either comes from
> security (whether this is "isolational" in nature like an ATM or Frame
> Relay VPN, or "truly secure" as in the case of an ecrypted 
> ATM or IPSec VPN
> is up to the user), or from "perceived service enhancement".  
> The latter
> could be via a CoS mechanism, which MPLS can potentially 
> offer, or from a
> hard QoS mechanism which can only be offered from...
> 
> a: A TDM mechanism (like SONET/SDH, which is expensive).
> b: A native ATM service.
> c: An over-provisioned stat mux service (eg. IP), which is 
> also expensive
> in the long term.
> 
> I know that Orchestream's core business is based on the provision of
> services over an MPLS core, so this may be akin to asking a 
> barber if he
> thinks I need a haircut, but is there any evidence that IP 
> VPN services are
> "truly profitable" (as opposed to "press release" 
> profitable)?  the problem
> is that asking most SPs this question will result in "sorry, 
> this is very
> confidential information" responses.
> 
> I'm not trying to bang a vendor drum here, I'm truly 
> interested because of
> the fact that about a dozen European SPs are technically bankrupt from
> being too dependent on IP services ever making money.
> 
> Cheers,
> Geoff
> 
> 
> At 19:38 18/04/01 +0100, Donkin, Richard wrote:
> >
> >
> >> -----Original Message-----
> >> From: Geoff Bennett [mailto:geoff.bennett@marconi.com]
> >> Sent: 18 April 2001 11:15
> 
> >> To: MP LS; mpls-ops@mplsrc.com; mpls@uu.net
> >> Subject: Re: ATM-LSR do they use OSPF/IS-IS or PNNI??
> >> 
> >> 
> >> Hi Niels,
> >> 
> >> There may be some confusion arising depending on how you 
> >> configure the ATM
> >> switch.  In effect there are three modes of operation for 
> >> this device...
> >> 
> >> 3.  Ships in the Night (SIN).  In this case, both ATM and 
> MPLS Control
> >> Planes operate simultaneously.  ATM signalling happens on VCI 
> >> 5, and MPLS
> >> signalling on VCI 32.  VCs that are set up as a result of 
> >> signalling are
> >> "owned" by one or other of these control planes.   SIN 
> would allow an
> >> operator to continue to run high revenue voice services (and 
> >> maybe existing
> >> Frame Relay or native ATM services...they make money too)  
> >> over the ATM
> >> "character" of the switch.  They can then run the 
> loss-making Internet
> >                                            
> ^^^^^^^^^^^^^^^^^^^^^^^^^^^^
> >> services over the MPLS character.
> >^^^^^^^^^^
> >
> >Very amusing... I'm sure this was just flame-bait, but first 
> of all, MPLS
> >supports IP services, not just Internet traffic, and you can 
> of course run
> >highly profitable IP VPN services over MPLS.
> >
> >Ultimately, ATM/FR services (as seen by the customer) may 
> well be carried
> >over an MPLS core, particularly as MPLS becomes one of the 
> key signalling
> >mechanisms for all-optical core networks, but since much of 
> the traffic
> >running over ATM/FR is actually IP, it may be simpler to 
> deliver IP VPNs
> >directly to the customer premises. 
> >
> >> Cheers,
> >> Geoff
> >
> >Richard Donkin
> >T: +44 (0)20 7348 1507
> >Orchestream
> >Avon House, Kensington Village, Avonmore Road, London W14 8TS
> >T: +44 (0)20 7348 1500 F: +44 (0)20 7348 1501
> >www.orchestream.com
> >
> >
> >--
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> ================================================================
> Geoff Bennett                             			
> 					Tel: (33) 497 21 43 62
> Director of Technology, OCTO               			
> 			Fax: (33) 497 21 43 50
> Marconi
> Gaia - Bat. E                           			
> 		email: geoff.bennett@marconi.com
> BP 123
> 06903 SOPHIA ANTIPOLIS
> FRANCE
> ================================================================
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>