COST-CONSCIOUS BUSINESS
NETWORKS
An Easy-to-Follow Guide to Saving Money with Satellite
Technology
(courtesy of Microspace Communications
Corporation)
Introduction
Even if you are not the technical type,
you’ve probably heard your staffers make these kinds of demands of your
business network:
Your regional executives are clamoring to get more
data to the field offices. Marketing has new PowerPoint presentations that need
to get in the sales force’s hands. Human Resources has a multimedia video
update on safety issues. Information Services is constantly sending out
software updates, including anti-virus protection that needs to be downloaded
to everyone’s computer. And the president wants to do monthly meetings to
speak about corporate performance.
Many companies are faced with the
question of how to support these applications over a growing number of
corporate locations with no additional budget. If you could do so–and save
up to 98 percent on video, voice and data networking
expenses–wouldn’t you owe it to your company to learn
more?
According to a recent CFO Outlook Survey from Financial Executives
International, chief financial officers (CFOs) will continue to restrict
technology spending in 2003. The quarterly survey showed CFOs bracing for a
double dip recession by reducing technology spending to 1.1 percent–down
from 1.9 percent in the last survey. The same downturn in predicted spending
has also been documented in a survey from Merrill Lynch & Co. of chief
information officers (CIOs).
| “Switching from landline to satellite delivery is a simple way to save operational costs while maximizing the value of your network.” —Geoff Bobroff Principal, Bobroff Consulting |
But this budget austerity may come at the
expense of sacrificing mission-critical business network applications.
Therefore, industry observers are urging companies to determine whether the
real answer might actually be a changeover in service providers - specifically,
to satellites.
“It’s dangerous for businesses to clamp down on
IT spending if it means reduced services,” said Geoff Bobroff, principal
of Bobroff Consulting, a consultant to the financial services industry.
“Important financial information needs to continue to flow unimpeded if
the country hopes to see a timely recovery from recession. Switching from
landline to satellite delivery is a simple and effective way to save
operational costs while maximizing the value of your
network.”
Microspace Communications Corporation (Microspace)
provides satellite network services to businesses ranging from Morgan Stanley
to Muzak, as well as 11 of the top 13 providers of financial information to
businesses.
This White Paper explains how companies like yours have
saved significant sums of money by using satellite technology for business
applications, without sacrificing quality or reliability.
Network Applications Proliferate
If your business is like most, you use your network for a range of purposes like those described above. According to Jupiter Media Metrix, a leading industry analyst firm, increasingly popular business network applications include:
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Microspace can deliver these network
applications via satellite wether they are based on file delivery or streaming.
Jupiter estimates the market for the applications to grow to $2.8 billion by
2005.
Of course, this type of exponential growth in network applications
is likely to overtax a company’s ground-based telecommunications networks.
For a growing number of companies, the answer is satellite-based delivery.
Satellite is perfect for streaming media.
Many companies are
reconsidering the expense of terrestrial technology in favor of currently
plentiful satellite capacity for these applications. The cost advantage of
making this switch can often be millions of dollars in savings each
year.
The Cost Advantage of Satellite Broadcasting
Microspace operates the largest business
satellite broadcast network in the world, with over 300,000 remote sites. Its
premier service, VELOCITY®, is a high-speed satellite delivery system that
broadcasts content from a point of origin to multiple receive sites. The key
benefit to using VELOCITY is the service’s fixed-price approach to
bandwidth availability, regardless of the number of sites. This enables
companies to control costs for delivery of their applications across
geographically dispersed remote locations.
In one case, a client was
looking at ways to bring streaming media content to its field offices. The
company had to serve 691 domestic sites, which meant $1.4 million in monthly
fees if they used standard telco high-speed lines. On the other hand, a
satellite broadcast network could deliver comparable service for less than
$34,000 per month. Satellite delivery reduced the projected cost from over $16
million to $400,000 annually.
What are the reasons for this cost
savings?
Satellite broadcasting is ideal for sending identical
content–such as training information, inventory files, point-of-sale
pricing tables, daily summary reports, software updates, and business
television broadcasts, etc.–from one location to multiple other locations
(“pointto- multipoint”). This type of content may only require a
one-way satellite connection, as opposed to two-way connections from a telco
company.
There also are clear benefits to a point-to-multipoint approach
to content delivery, as opposed to the point-to-point network structure of most
telco circuits.
Let’s consider the case of the company described
above. They want to send financial information to each of their 691 locations.
The file is large, and may take an hour to send.
With point-to-point
circuits such as telco lines, file distribution is often done sequentially.
That means it would take 691 hours to send the information to each of the
company’s remote locations. With a satellite broadcast network, all sites
get the content at the same time. The same file could reach all 691 locations
in just one hour by satellite. That is the advantage of point-to-multipoint
content delivery.
Now let’s look at how some companies are using
this cost-saving approach for new applications.
Distance Learning
A leading Fortune 500 company employs a
geographically extended sales force comprised of more than 8,000 sales
associates. They are based in home offices, in headquarters and regional
offices, and still others report from the road. Because of the continuing
introduction of new products and services, employees must be trained on a
rotating 60- to 90-day basis.
Historically, the company gathered its
employees at a central training location for this ongoing education, and then
sent them back to the field. Every training session cost the company
approximately $500,000.
With distance learning by satellite, the company
virtually eliminated the cost of accommodating its large sales force for
centralized training. If the company were to do only quarterly training (which
it in fact far exceeds), the equipment and services expense would be paid for
after the first broadcast. The true benefit for the company is that the sales
associates now spend less time in training and more time with
customers.
Distance learning can benefit any company with multiple
locations and a need for real time training across many industries. The bottom
line is cost and time savings and increased efficiency.
Business Television
Business TV is the ideal communications
medium for delivering the same message to all employees at the same time. In
fact, today there are over 250 business TV networks operating in North
America.
A leading financial services firm makes the best use of its
business TV network. The company broadcasts daily, and even at times offering
multiple programs. Content includes industry analyst updates, new company
policies and new product announcements.
Do all employees need to watch
every business TV broadcast? In reality, only a subset of employees needs to or
wants to see certain programs. For example, only the sales force needs to see
the product manager introduce a new product. At the same time, however,
customer service representatives need to learn how to support that new product.
So the business TV network can be utilized for the initial training of just the
customer service staff as a separate broadcast.
How important is it to
be able to convey the same messages to hundreds of regional offices,
simultaneously and efficiently? Think back to the tragedy of September 11,
2001. Many New York City financial services offices were destroyed. Wall Street
was shut down. Worldwide investors were frantic.
Despite the
devastation, the chairman of this financial services firm was broadcasting live
on September 12, 2001. The message was clear: Their business would
survive.
While this is a dramatic example of a company using a business
TV network, there are many everyday advantages that companies experience.
Education to employees increases ROI. Improved product knowledge translates
into faster sales cycles. Better human resource information distribution
counteracts future litigation costs. The examples are as diverse as the
businesses using satellite TV networks.
Additional Cost Considerations
Once a company begins to employ broadband
and streaming media applications, it typically finds that its bandwidth needs
do increase because of adding new applications. Companies identify new and
different uses for the technology. Other departments start to
“piggyback” their own applications on the original range of
services.
When a company’s bandwidth demands begin to outpace its
available satellite bandwidth, that’s when it fully realizes the advantage
of working with a satellite content delivery provider like
Microspace.
Microspace works with each of its clients to arrive at a
fixed-price arrangement for bandwidth availability, based on the expected usage
for the anticipated applications.
As the network demand grows,
Microspace’s VELOCITY system can accommodate an increase in usage with a
single phone call. One customer has nearly doubled its bandwidth in the past
six months, simply because of adding additional services. And at the same time
no remote site visits or additional capital expenses were incurred.
| The Simple Truth About Satellites | |
| Is the content you’re sending across your network
broadcast-friendly? Is your staff too busy? Is the existing network already
congested? Is security of your firm’s content important? If you answer yes
to each of these questions, satellite broadcasting may be the answer that saves
your company a lot of money.
Why Pay For Two-Way Connections? Satellite broadcasting is ideal for sending the same content from one point to multiple points. Inventory files, point-ofsale pricing tables, daily summary reports, software updates, and multimedia videos are typical types of broadcast-friendly content. Point-to-Point Is Pointless Many terrestrial networks are built on point-to-point telco circuits. With some applications, like credit card verification, that is the right thing to do. But for most corporate communications, using a point-to-point topology is costly and time consuming. |
Don’t Share Telco
Bandwidth
Don’t Share Telco Bandwidth There are already certain mission-critical transactional applications running on your existing circuits. These circuits are already busy and often times too congested. They simply can’t handle the new applications and don’t have to. With satellites, your network infrastructure can carry a great deal of content wherever you need to get it, without overtaxing the existing circuits. Satellite Networks Are Secure Unfortunately, hacking into corporate networks is all too common. With a satellite broadcast network, your content is as safe as the level of security measures you choose. Different corporations use different levels of security, but satellite networks are clearly more secure than the public Internet. |
To gain a better understanding, let’s
look at another example common to many large companies: interactive kiosk
displays at retail outlets, airports or other locations. In this example, the
economics of satellite delivery for content distribution are far more
attractive than any other delivery mechanism.
Consider a kiosk network
with 1,000 terminals, deployed throughout the U.S., each terminal requiring a
256 kbps channel. With VELOCITY, the cost per month for each location is only
$13.75, for over 77 gigabytes of content delivered to the
kiosk.
Let’s say the network suddenly needs to double its speed.
Microspace’s satellite service is easily scalable. Within 24 hours of
placing the request, the same network can be supplying a 512 kbps connection
with a monthly increase of approximately $3.00 per site in a 1,000 site
system.
The Microspace VELOCITY service is a point-to-multipoint
technology with a flat monthly fee. As your business expands and the number of
locations increases, the cost per site actually decreases. With the example
above, if you increase the number of sites to 2,000, the monthly cost drops to
$6.83 per site.
Whether you’re increasing bandwidth to reach
additional remote sites or to accommodate additional streaming media
applications, it’s clear that satellite network delivery is a
cost-effective alternative to terrestrial networks.
Conclusion
The business case for satellite networking
has been well summed up by Christopher Baugh, principal analyst with Northern
Sky Research.
“The typical business uses its network for
applications including earnings calls, distribution of financial information,
sales training, employee education, multimedia file delivery, and business
television, to name a few,” noted Baugh. “Our research indicates that
moving to satellite distribution of these services may allow companies to
maintain these sophisticated networking capabilities and protect their cash
position at the same time.”
| “Our research indicates that moving to satellite distribution of services may allow companies to maintain sophisticated networking capabilities and protect their cash position at the same time.” —Christopher Baugh, Principal Analyst, Northern Sky Research |
The economy isn’t going to turn around
by businesses doing nothing. Even if you’re not increasing your IT
spending, you need to maximize the return on your network investment. It’s
essential to look at new ways of doing things. Shifting to satellites is an
easy way to cut costs while improving your network capabilities.
By
making a simple switch from landline to satellite delivery for broadcast-type
applications in your business, you can save as much as 98 percent in annual
network costs. That’s a compelling return for a decision that will be
transparent to your organization.
About Microspace
Communications Corporation
Microspace Communications
Corporation (Microspace) delivers video, audio and data services across
business networks at up to 98 percent lower costs than terrestrially-based
telecommunications carriers. Microspace is the leading provider of
point-to-multipoint satellite services and operator of the largest business
satellite broadcasting network in the world. Its VELOCITY® satellite
service enables reliable and affordable distribution of a broad range of
applications from business television to streaming media broadcasting to
high-bandwidth data transmission. Microspace offers its VELOCITY satellite
service under an innovative fixed pricing model, allowing a company to simply
and affordably expand its bandwidth as enterprise network applications demand
it. Microspace’s customers include companies such as Muzak, Morgan Stanley
and eSignal.
Founded in 1988, Microspace is a privately-held company
headquartered in Raleigh, NC, and a subsidiary of Capitol Broadcasting Company,
founded in 1937. For more information, visit
www.microspace.com.
Microspace Communications
Corporation
3100 Highwoods Blvd
Raleigh, NC 27604 USA
(919)
850-4500
www.microspace.com
Copyright © Microspace
Communications Corporation. 2003. All rights reserved.
