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The Bandwidth Bank

This is a topic that we have discussed on several occasions over the last decade, but it now seems as though things are slowly moving forward. A new company, Intabank, has set up a service whereby its enterprise customers can pool bandwidth that the intermediate company can then use to sell to other customers; enabling organisations to monetise their network connectivity assets.

Enterprises typically have contracts with carriers, where they buy capacity in the form of broadband, IP or other forms of data. But most of the time they don’t use all of the capacity that they have paid for. At the same time this capacity has truly become a commodity, and, while the carriers still try to sell this capacity as a so-called ‘premium managed service’ such as MPLS, more and more business customers understand that they don’t need that ‘premium’ and just would like to buy the commodity and add intelligence to it on demand.

Many of these enterprises are connected through data centres with their interstate or international offices. What Intabank offers is a service whereby they can cross-connect their services—which they operate in at least ten (10) data centres—with the hubs of the services used by their customers. Customers who are not using data centres can be linked into the system through a simple local loop connection.

Intabank then uses its sophisticated tools and technologies to pool bandwidth from their customers, maintain a high quality of service, high levels of security and privacy, and a guaranteed data connection quality; and they are able to offer surplus bandwidth to others wanting “burst capacity” for strategic projects or specific IT peak events, with no long-term contracts and for a fraction of traditional connectivity costs. Some of the typical scenarios here include:

  • Large infrastructure back?ups and maintenance events
  • Major production transfers (including media)
  • Marketing events that need more connectivity
  • Introduction and promotion of new products and services

The service operates in near real time, which means that customers can make capacity available, as well as reverse that situation within seconds. However, what is usually the case is that companies know when their capacity is not being used, or not being used as much—e.g. evenings, weekends, etc.—and they indicate to Intabank that during these periods the company can use, say, up to 80% of the capacity that is available during that time.

Interestingly, and totally separate from the Intabank service, I also came across a new service in Europe—Crowdroaming—which is set to be launched soon. On a residential user level an application has been developed that allows people to share data on their smartphones. This service is aimed in particular at overseas travellers who are charged through the nose by the mobile carriers for mobile roaming. The idea is that you make your excess data available, free, to these travellers and you can use a similar service when you are travelling somewhere else in Europe, at no charge.

In both these cases what we are seeing is that people and companies want to optimise the services that they are buying, and these new applications and services are finally making this possible. It demystifies the world of telecoms, where operators make their services as complex as possible because they know that they can earn 15%-20% more revenue by doing so. This allows them to sell services to their customers in the knowledge that they will not use all of it, and up until now customers have not had any tools to check or manage this.

This is only the beginning. It is the start of a more sophisticated OTT network of services and applications that are going to change the use and management of bandwidth fairly radically over the coming years. Eventually telecoms operators will be forced to take the complexity out of their offerings so that these services become available without the need for intermediate tools. But it will be a long time before the operators are ready for this, and no doubt by that time these intermediate players will have moved on to other interesting innovations.

By Paul Budde, Managing Director of Paul Budde Communication

Paul is also a contributor of the Paul Budde Communication blog located here.

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