Driving ISP Profitability

The hype surrounding the explosive growth of the Internet is unprecedented. The potential of this “network of networks” seems unlimited. So why are so few Internet service providers (ISPs) turning a profit?

The answer to this question lies not in the scale, hype or potential of the Internet, but in the mundane day-to-day operation of this network. In the last five years, ISPs have made tremendous investments to build out their network infrastructures. While these efforts have been wildly successful in providing ever-increasing bandwidth and network capacity, there has not been a commensurate level of success in the development and delivery of tools that can help them effieciently manage this infrastructure. Future ISP profitability will hinge on the delivery to market of these tools, and the ability of ISPs to use them to achieve two objectives:

• Better, lower-cost and more efficient operations.

• Faster, more reliable deployment of revenue-generating services.

Today, many ISPs operate large, unprofitable networks that take an enormous amount of highly skilled personnel to manage and maintain. At the same time, they are under immense pressure from capital markets to begin generating real returns on investment from their network build-outs. Thus, the challenge facing ISPs today lies not in the continued buildout of their networks, but in managing what they’ve built.

One of the most vexing problems facing them is managing the thousands of routers, switches and other devices they’ve deployed. The configuration and management of these devices is currently done manually, one at a time, by operations personnel. This practice does nothing for the bottom line because it relies on skilled human operators and is prone to human error, which results in service outages.

Manual device configuration practices are also time-consuming, thereby slowing the rollout of revenue-generating services. They also simply cannot scale--physically or economically--to meet the configuration work required for the continued rollout of these services.

The ability to replace these manual device configuration practices with automated ones will be critical as ISPs seek to make the transition from infrastructure build-out to profitable operation. Those that can find ways to efficiently configure and control their network infrastructures will be able to roll out new services faster and manage existing ones better, giving them a distinct competitive advantage over ISPs that choose to cling to current manual configuration management practices. 

The Growing Complexity of Networks

On the one hand, ISP networks are evolving at an extremely rapid pace. At the same time, their networks are looking more and more like those of their competitors. Indeed, one can easily see a day in the not-too-distant future when all ISP networks will have virtually the same infrastructure technologies in place.

In an environment where network infrastructure is rapidly approaching commodity status, the ability to roll out and manage competitive services in an efficient and profitable manner will become the most important core competency of ISP operations.

In an environment where network infrastructure is rapidly approaching commodity status, the ability to roll out and manage competitive services in an efficient and profitable manner will become the most important core competency of ISP operations. We are already seeing the deployment of these services today, with virtual private networks (VPNs), extranets, voice over IP and so on. However, the management tools required to derive acceptable profits from these services are not yet widely available. This is especially true in the case of configuration management tools (tools that automate the configuration and control of devices, services and networks), which only now are beginning to reach the marketplace.

As a result, rolling out and managing ISP services continues to be a complex and labor-intensive process. For example, to deploy a single VPN, ISPs must configure and manage all of the appropriate devices in the network, as well as interconnections within the network, between the network and the ISP and between the ISP and other providers. They also need to provide access control, security and appropriate functionality for a broad range of users, including customers, engineers and ISP operations personnel.

Multiply this single VPN deployment by thousands of VPN deployments, and the complexity reaches staggering proportions. Multiply this again by the rollout of other complex services, and it is easy to understand why automated configuration management of devices, services and networks is critical to profitable ISP operations.

This situation puts ISPs in a conundrum. The only way to generate profits in a “commoditized” market is to enhance the value of the network by rolling out new services. But with each new service comes increasing complexity, which makes it more difficult to generate profits because there are not sufficient tools to manage this complexity.

The key to breaking out of this vicious circle is the commercial availability of a new generation of tools that can simplify the deployment and management of network services. Automated configuration management tools will be the most important of these, because they will enable ISPs to do away with the limitations of manual configuration management techniques, and replace them with highly scalable automated ones. It is critical that network operators can also make customized adjustments in devices that rely on automated configuration tools. This enables ISPs to take advantage of the new generation of tools without losing control of their networks.

A single person using an automated configuration management tool will be able to do the work of an entire department of engineers, while providing 100% configuration compliance across all devices.

A single person using an automated configuration management tool will be able to do the work of an entire department of engineers, while providing 100% configuration compliance across all devices. These tools will enable ISPs to achieve profitable network operations by speeding delivery of new services, while eliminating configuration-related service disruptions.

To deliver on this promise, true configuration management solutions must provide the following set of characteristics:

• Policy-based automated configuration--enabling ISPs to deploy error-free configurations across thousands of devices. This enables faster deployment of revenue-generating services.
• Verification and reporting--to validate configurations across all devices and identify inconsistent device and service configurations in areas such as customer records, service-level agreements and network databases. This enables operations personnel to identify and correct potential trouble spots before they cause service disruptions.
• Auditing and archiving--to provide a “paper trail” of when, why and by whom configurations have been changed. This greatly reduces the time required to identify and fix configuration problems. This also eases knowledge transfer when new people join the operations department.
• Customizable automated configuration systems--so manual changes can be made. This ensures that network operators have the flexibility to manage the network on demand without negatively impacting network integrity.
• Multi-vendor support--this eliminates the cost and time required to train operations personnel in various vendor configuration conventions, because one tool can configure any kind of device. This also reduces personnel costs because work that historically has been done manually by high-salary engineers can be done automatically by less-skilled personnel.

These capabilities ensure 100% consistent configurations across all devices, thus enabling ISPs to focus fewer resources on non-value-add manual-configuration work and more on the development and delivery of profit-enhancing services.

Paving the Road to ISP Profitability 

The ISP competitive landscape is rapidly approaching a status similar to that of the airline industry: With every company using the same equipment, the competitive dynamic boils down to which companies can operate this equipment most efficiently. In this environment, manual configuration management is the Achilles’ heel of ISP operations. The networks may be bigger and faster than ever before, but if the devices in those networks are not configured properly, then ISPs cannot possibly derive an acceptable ROI from their infrastructure investment.

Automated configuration management tools will provide the operational breakthrough required for ISPs to generate sustainable profits from their networks. They will lower ISP operations costs, accelerate the deployment of revenue-generating services and improve the quality of their networks. 

These tools will also automate the process of deploying new devices in the network, enabling new kinds of services that would be impossible to deploy under the constraints of manual device configuration practices. Thus, automated configuration management tools will be the key technology driving ISPs to profitability in the years ahead.
Jonathan Wolf is co-founder, president and chief executive officer of Goldwire Technology. He can be reached at jwolf@goldwiretech.com.
This article has been adapted from one that appeared on ISP-Planet.com (February 16, 2001).