To help relieve the difficulty of passing corporate applications and other traffic efficiently across the WAN boundaries of various service providers, Munich-based Siemens enlisted the help of a virtual network operator in late 2004, said Alfons Kuhn, director of the Siemens corporate network.
Now in its second year of operation, Siemens' managed network approach "is working fine... we have great performance improvements," Kuhn said in a recent interview.
Vanco PLC, a London-based virtual network operator first established in 1988, handles the Siemens traffic and has helped the company realize a "major savings" in annual network costs, which are in the low billions of U.S. dollars, Kuhn said. He would not share more details.
A Vanco spokeswoman said the company won its networking contract with Siemens in late 2004 for a term lasting three years. Kuhn refused to disclose the cost, but Vanco said the three-year deal was worth US$5.59 million at the time.
Siemens chose Vanco over five other network providers, Kuhn said, but he would not name the other vendors that bid on the contract. He said the negotiations took several months.
The decision to seek out Vanco started when Siemens' central management decided that the company needed to migrate corporate networks to state-of-the-art technology that would use more flexible and efficient Multi-Protocol Label Switching (MPLS) networks, allowing Siemens to "get rid of proprietary networks and tools," Kuhn said. "So we went for a managed network... to manage things from the customer edge routers, end to end, across the whole network."
Kuhn attributed the performance improvements to the use of MPLS technology and to Vanco's role "as a spider in the network," meaning Vanco manages data at every point at which traffic crosses from one major service provider to another. Siemens' major global network providers are AT&T Inc. and T-Systems Enterprise Services GmbH.
He explained that at each handoff between the two major physical networks, Vanco prioritizes traffic based on its importance (as established by Siemens), so that traffic for an SAP application, for example, gets get higher network priority over, say, e-mail or a file transfer. Vanco works in 2,000 Siemens networks points of presence in five continents, Vanco said.
About 100 network administrators at Siemens have reported that they "see and feel improvements with fewer outages, better service levels, and a better feeling overall," according to Kuhn.
Kuhn said the migration from the old network, called the Corporate IP Network, to the new network, called Siemens Network Exchange, with its managed services and the public MPLS networks, involved a "big learning curve."
During the project, he learned the value of "staying in touch with the user community to find out if there's an impact of changes," he recalled. There were minor outages in the initial phases of the turnover, but "we learned that every migration has a risk, and you can limit the risk," he explained.
It's important that end users know that "something will fail" when a network is altered, he said. "And IT managers have to make sure users know how to deal with it and how to raise a call to somebody in the project organization."
During such a migration, network administrators need to tell end users, "Hey, man, it's a migration," Kuhn said. "If there's a problem, just knowing that makes things more pleasant" for the users.