Despite pressure on companies to find more cost-effective ways to maximise investments, there is still a distinct disconnect between businesses’ bandwidth requirements and what they are currently purchasing.
According to Stefano Mattiello, executive head of the enterprise group at Neotel, businesses are either catering for their maximum requirements, despite not using it all, or they are underestimating what their requirements are.
The IT sector is already working on finding alternative methods to drive costs down and value up through on-demand computing, where organisations opt to purchase a certain number of a specific solution of software package, paying only for what they use.
Mattiello believes the telecommunications environment lends itself to a similar solution – bandwidth on demand.
“In the past, telecommunications was seen as a cost item, often the first place where organisations looked to save on costs. In addition to that, in certain industries such as the business process outsourcing (BPO) or contact centre environment, it was seen as a major inhibitor due to the high costs of telephony and bandwidth,” he says.
Mattiello believes by changing the way in which bandwidth is packaged for the enterprise client, it will add a lot more value to South Africa’s economy.
There are two key components to the Neotel solution: bandwidth on demand and the utility pricing mechanism. Each has a distinct function in ensuring that organisations run their telecommunications more efficiently.
“From a bandwidth on demand perspective, we follow a consultative process with our clients to determine what their current bandwidth requirements are and to project what their future requirements will be,” says Mattiello.
For example, should a customer require 100Mb now and foresee the need for 500Mb in five years time, Neotel would install a pipe for a larger capacity. “This means that if their requirements change quicker, or increase dramatically, the infrastructure is already in place to provide this to them – and we can increase their bandwidth in much shorter timeframes.”
Traditionally, a change like this would have resulted in the need to install more pipes.
“The utility pricing mechanism, on the other hand, works very closely with bandwidth on demand and allows for peaks and troughs in bandwidth usage,” he says.
Should a client only use 10% of the bandwidth available to them for 90% of the time, but need to increase it to 40% for the remaining time, Neotel can make that available to them with 24-hours notification. “Bandwidth can be scaled up or down, within very short turnaround times – a process which is managed by Neotel.”
Mattiello says the Neotel network was designed to allow for significant scalability, which eliminates long waiting periods for increases in bandwidth. “It allows for unforeseen growth in bandwidth requirements on the client side, enabling us to meet those requirements very quickly.
“The critical point we are trying to make, is that it doesn’t make sense to spend R3-million on a Ferrari in case you have the need to drive at 200km per hour someday, knowing that you will probably only drive 60km per hour for 90% of the time,” says Mattiello.
He believes telecommunications is often treated the same where customers buy to cater for their maximum requirements despite knowing that they will not be using it. “We believe clients derive far more value from buying for their average use and then letting us manage their peak requirements,” he says.