Attack of the VPN clones?

As moviegoers head to the cinema to catch the latest installment of the "Star Wars" epics, we can't help but think of another "clone" market space - IP VPN services. A flurry of recent announcements detailing IP VPN offerings begs the question: Will service providers ever learn to offer differentiated services, or will customers forever be subjected to attack of the clones?

The most noticeable distinctions in IP VPN offerings are typically one of three technological bases (which should be mostly, if not completely, transparent to enterprises rather than used for differentiation of the service): architecture, type of enabling solution (software or device) and underlying core network. Architecturally, the service delivered is either from the network, the premises, a client or some combination of these. The enabling solution will impact the delivery architecture and also influence whether the service relies on Multi-protocol Label Switching (MPLS) or IP Security. The underlying core network is generally IP, ATM, or MPLS, with different access methods like dedicated lines, frame relay, DSL, cable or even dialup. Regardless of these choices, service providers typically rely on architectural or network criteria for their service differentiation.

Granted, these differences can be meaningful for certain types of customers-a single deployment architecture/strategy won't fit all customers that might be served with IP VPNs. For example, a small and midsize enterprise with an intranet of a few small offices may select a lower-cost, network-based IP VPN rather than a premises-based solution, while a health care extranet may deploy customer premises equipment to ensure Health Insurance Portability Accountability Act compliance. Besides, is a particular technology really substantial differentiation or is it just the result of network decisions driven by the type of service provider and its network strategy? If you said the latter, the force is strong in you.

Sustainable differentiation is often difficult to develop, but it is critical for success. Although VPNs have a high degree of customer stickiness due to difficulty in changing providers, getting the customer in the first place may depend on a provider's ability to offer a compelling service. As enterprise customers get more savvy in service selection, differentiation will depend on technical capabilities or features such as the following (although they should be packaged in a user-friendly way):

• Offer customers a CNMS that enables them to at least view the status of the network, billing information, etc. Even better, allow them to self-manage items-a feature supported by most vendor platforms.
• Bundle managed security services and be willing to handle the difficult stuff like intrusion detection, URL filtering, virus scanning and key management.
• Offer additional networking functionality such as rate limiting, applying quality of service end-to-end.
• Offer hybrid packages based horizontally on location type, or even vertically based on type of market/application.
• Create customized packages for specific verticals.
• Go beyond just offering additional speeds/feeds by allowing flexible selection of different speeds at different times (bungee bandwidth).

A few service providers have begun to diversify their IP VPN offerings with one or more of the items above. But the usual path of service providers is to look at their closest competitors and package the same options-thus contributing to the cloning effect. If you want to stand out from the crowd, your customers need something to latch onto besides a lower price position.

Briere is CEO and Bracco is President of TeleChoice, the strategic catalyst for the telecom industry. They can be reached at telecomcatalyst@telechoice.com.