Flowserve Corporation, a Texas-based provider of flow control products and services for pipelines and infrastructure, recently launched and an end-to-end, global MPLS network with Orange Business Services.
Mike Wald, vice president of operations for Flowserve Corporation’s information technology department and VP of IT for the Flow Control Division, said the network is paying dividends already. Its value is not just in the number connections and bandwidth throughput, but in Flowserve’s ability to monitor the performance of the network's constituents.
Flowserve employs 14,000 people in 55 countries. Wald’s team is responsible for maintaining network performance and enhancing the company's IT infrastructure to meet the growing needs of the business.
With shipments across the world that include industrial pumps, seals and valves, as well as a range of related flow management services, Flowserve’s network encompasses enterprise voice, data and wireless services, and connects more than 250 sites in 56 countries.
Already on a path toward MPLS and the Cloud for several years, Flowserve finds its new end-to-end MPLS deployment far more efficient. Analysts are not surprised to see deals of this scope on a more frequent basis.
Given the scale of global networks, enterprises are looking to service providers to help them manage the complexity of their networks, according to Rena Bhattacharyya, Research Manager for IDC's Business Network Services.
Bhattacharyya said "We are seeing growing interest in managed services among enterprise customers. From 2009 to 2014 we are projecting a CAGR in IPVPN MPLS revenue of 5.3% in the US."
Bhattacharyya continued, "At a time when IT resources are stretched, managed services can offer cost savings benefits over in-house management. Of course this must be evaluated on a case by case basis. This is an area in which service providers are looking to build their expertise, as it adds incremental revenue and deepens relationships with customers."
Wald said the benefits are at least two-fold. In comparison with the competition, the ability to expedite orders and monitor performance accurately create a higher level of customer service, which is a competitive advantage. Meanwhile, Flowserve eliminated its own network infrastructure as a cost center and wound up with more bandwidth for less money.
According to Ted Chamberlin, Research Director, Enterprise Network Services, Infrastructure and Operations, Gartner. Inc., a growing number of networks globally depend on MPLS to improve network performance.
"Most customers have made the transition to MPLS as they have had a business need for a fully meshed network where each location can speak to each other instead of going through a hub like in the frame/ATM days. The primary early driver had been voice over IP as it needed a priority class of service but now the as VOIP delivery has become mature, managing multiple 'sessions' -- video, voice, enterprise application flows have become the future drivers," Chamberlin said.
"We predict that the IPVPN market (we don’t break out Private vs. Public-but the lionshare of the growth will be MPLS versus IPSec VPN) will grow by 9.6% to a $57 billion dollar market by 2014. This growth is displacing leased lines and legacy packet services. Only the growth of Ethernet services is slightly outpacing IP VPN. Ethernet is pegged to grow 11.5% by 2014 to a $25Billion dollar market globally."
As Flowserve’s network managers confronted the growing complexity of its network requirements, they realized that the challenge extended beyond the scope of the Frame Relay to MPLS migration: virtually all new initiatives were one more element in the mix on a network that was already congested.
Wald described the network of a few years ago as a real challenge, serving 50 or so plants, and 50 or so ERP systems. As will happen through product acquisition and the legacy systems they may introduce, the IT managers within each brand and group functioned as a federated organization. According to Wald, supporting more than one hundred brands and their Enterprise Communications needs became cost prohibitive with the incumbent provider.
With a mission to drive cost down and performance up, Flowserve fielded bids from eight service providers, ultimately selecting Orange Business services. Orange’s customer-oriented service and more bandwidth for less money, sold Flowserve.
Diana Einterz, Senior Vice President, Americas, Orange Business Services, said Flowserve's focus on improving customer care through this deployment hit Orange Business Services' sweet spot.
Einertz, who was previously director of the International Customer Services & Operations organization, and provisioned AT&T data networks at home and abroad for 20 years, underscored the importance of customer service in enterprise networks, both for the client and end user.
Einertz holds purview over the Americas, managing more than 1500 employees and approximately 1000 customers. Orange Business Services employs approximately 20,000 employees in 220 countries and territories. The parent company, Orange, was formed originally in 1994. After a series of mergers and acquisitions, Orange emerged through the last decade as the face of France Telecom's Wireless and Internet services. While the brand name Orange has immediate recognition in Europe, its business services unit is not often identified among the front runners of the U.S market.
With a global implementation in mind, even a US-based company can benefit from Orange's extensive global network reach. According to Einertz, enterprise communications deployments for multinational corporations typically include 5 to 6 countries at a time.
With more than 50 countries and 6 continents in the mix for Flowserve, this is an impressive win for Orange, according to IDC's Bhattacharyya, especially given the extensive managed services component.
The services online now include managed VoIP for 5,000 handsets, enhanced messaging protection for 11,000 mailboxes; management of remote devices and remote access for 500 users; and LAN management for 1,000 network switches. When the full network is completed in March 2011, it will support Flowserve’s critical Oracle and SAP applications at a significantly lower cost threshold than the legacy network.
The savings in the bandwidth component take the form of a flat fee and an open port. In its previous network Service Level Agreement, as is often the case, Flowserve’s bandwidth fees were based on an average bandwidth consumption that would not exceed a threshold of demand. Spiking above the threshold can create costly unforeseen expenses.
According to Wald, in 2004, Flowserve paid just under 10 million dollars for 170 locations that needed MPLS, VPN, Frame Relay, and other typical services. The company was able to bring that cost down incrementally, year by year, but not while improving vendor customer service and not on as large a scale.
In 2011, when the project is complete, Flowserve expects it will have all of its enterprise communications integrated in one network, including the network firewall and intrusion detection, 268 sites, seven times the amount of bandwidth, and 25 new local area wireless sites. According to Wald, the new package will have an annual cost of less than $6 million for the much expanded service footprint and the additional bandwidth.
The global portfolio of Orange Business Services has been strongest in Europe, where this type of network service package is more popular. Gartner’s Chamberlin said most global and regional carriers have solid implementations of MPLS with 3-6 classes of services, and internetworking that includes Internet and wireless networks. "I would say that the global providers such as AT&T, BT, Orange Business Services, Verizon, T-Systems, Singtel, Telus, Bell Canada, Global Crossing and smaller players like Masergy are strong providers."
He said Gartner’s data shows US MPLS penetration slightly above 50 percent of enterprise networks, though sales of managed MPLS ports are not as robust in the US as in Europe, probably from 45-55 percent. In Western Europe, stronger growth is reported in the use of managed MPLS networks, where the carrier manages the edge router; MPLS is deployed in 70-80 percent of Europe’s enterprise networks. The Asia-Pacific markets reveal some growth in enterprise communications, but managed MPLS adoption is very slow, due to fragmentation of locations, regulatory issues and legacy investments.