How Ethernet offers a more cost-effective and flexible alternative for businesses

Mike Maloney, Vice President, Comcast Business Services

The Internet is an integral part of doing business — from sending emails and hosting a website to setting up virtual private networks and interconnecting locations. Today, more than ever, organizations require reliable Internet connectivity with increasingly higher speeds to satisfy growing application requirements, while carefully managing IT costs.

“Internet usage continues to grow and evolve significantly from its simpler Web browsing and email origins,” says Mike Maloney, vice president of Comcast Business Services. “Organizations, large and small, now extensively rely on the Internet to increase productivity, provide business-to-business or business-to-consumer services, streamline their supply chain and outsource IT applications to reduce costs.”

With Internet bandwidth requirements continually increasing, Ethernet dedicated Internet access is becoming a cost-effective and more flexible option to connect to the Internet, Maloney says.

Smart Business spoke with Maloney about how Ethernet stacks up against T1 connections.

How has the adoption of new technology increased the need for better Internet connections? 

The potential for new technology to lower the cost of business operations is clear. For example, by moving applications to hosted or ‘cloud-based’ services, an organization can eliminate the capital expense of the application servers and operational expense of software licenses and support, while reducing the burden on their IT support staff. Spending on public IT cloud offerings is forecast to reach $55.5 billion in 2014, representing a 27.4 percent compound annual growth rate, according to a recent report from the International Data Corporation. This rapid growth rate is more than five times the projected growth rate for traditional IT products.

Meanwhile, utilizing this new technology will require a higher-speed Internet connection. An organization’s bandwidth requirements may increase due to:

  • An increasing number of visitors to your locally hosted public website for e-commerce transactions.
  • An increasing use of cloud-based services where you move applications from running locally to a remote data center or hosted server in the cloud.

The capital expenditure and recurring operating savings of cloud-based services typically provide a better return on investment than the additional Internet bandwidth costs. During times of accelerated growth, organizations can leverage the Internet to rapidly respond to increased productivity and supply chain, while carefully managing costs.

How have businesses been using T1-dedicated Internet access?

A popular way for organizations to connect to the Internet has been via a T1-based dedicated Internet access (DIA) service. T1 DIA services are typically offered over one or two T1 circuits so the bandwidth options are limited, inflexible and costly as an organization’s bandwidth and application requirements grow. To be competitive, you need to quickly and cost-effectively adapt your Internet access bandwidth, so T1 DIA services are challenged to meet these elastic bandwidth requirements.

With a single T1 circuit operating at 1.5 megabits per second (Mbps), you need to purchase upgraded service to get more bandwidth, which may require a new T1 router to support the bonding of the two T1 circuits. Typically, that will cost another setup charge, as well as a higher monthly recurring cost for the service. Additionally, there will be service disruption if you must replace the existing T1 equipment, and new equipment or circuits may delay the upgrade days or even weeks.

Many T1 DIA service providers cannot provide Internet access beyond two T1s. If your Internet access bandwidth needs increase beyond that, you will have to switch to a different technology with higher bandwidth choices.

Why is Ethernet-dedicated Internet access a better choice for businesses?

Ethernet DIA services are typically delivered over a single Ethernet fiber optic connection that can handle any amount of bandwidth between 1 Mbps and 10 gigabits per second (Gbps). Ethernet DIA service can be purchased in flexible bandwidth increments up to the Ethernet port speed, and the port speed depends upon your initial and anticipated bandwidth needs for the duration of the service agreement. A 10/100 Mbps Ethernet port speed is sufficient for most organizations. Unlike T1-based DIA services, Ethernet DIA services are not offered based on circuit speed.

Capital expenses are also low to non-existent with Ethernet DIA. If your building does not have a fiber optic connection, your Ethernet DIA provider will deliver a fiber optic connection, which has a one-time cost associated with that installation. Otherwise, if you can use an available Ethernet port on your router you are ready to go, as the Ethernet DIA service demarcation device is included in the setup cost. Ethernet DIA enables you to better manage your IT capital and operating expenditures during varying economic cycles. Cost savings can be achieved because you don’t have to switch Internet access technologies or providers when your organization’s bandwidth needs exceed 3 Mbps (two T1s).

Your Ethernet DIA service provider can remotely reconfigure the Ethernet service demarcation device to support the new bandwidth you require, and you can continue to use the service up until that upgraded amount. If the Ethernet service demarcation device needs to be restarted, you may only experience a minimal service disruption. This is in contrast to T1 DIA service, where new equipment and new, higher speed circuits may take days or even weeks to get implemented.

Organizations increasingly utilize the Internet as a critical business tool, and Ethernet-based DIA services provide many benefits over T1-based DIA services. The most obvious benefit is higher bandwidth. Ethernet DIA services also enable organizations to more quickly and cost-effectively add Internet access bandwidth to optimally manage their IT costs while they grow their business.

Mike Maloney is a vice president of Comcast Business Services. Reach him at [email protected]

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