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Managed Networks for Retailers

8/5/2013 2:45:00 PM

Background

The retail business in the UK has never been more competitive. With large-sized retailers maximizing their supply chain and continually driving down prices, plus the ever increasing expansion of online shopping, today’s retailer faces a number of urgent challenges. They must find new and innovative ways to draw customers to the store, and to ensure that the customer buys in-person and not at a discount online retailer. At the same time, cost pressure means that IT budgets are under fire while the IT department is expected to do even more with less. Point-of-Sale (POS) and Inventory Control systems must work perfectly at each outlet, while the geographic placement of many outlets (across the UK and the world) means that the network consists of connections from a number of different telecommunications services providers.

The mission of Vodat International, in business since 2002, is to help UK retailers to meet these challenges by maximizing their IT investments (in terms of both technology and IT skills) while keeping costs manageable. Vodat does this by offering advanced and reliable managed services and telecom solutions to the UK retail industry. Vodat’s target customer base are retail companies with between 20 and 1,500 retail outlets (plus one or more main office and distribution centers). Vodat’s customers (which include companies such as LUSH, Aurora Fashions, Supergroup, and the British Heart Foundation) number more than 80 in the UK, with 7,000+ retail locations.

The company focuses on Tier 2 retail companies, whose IT department may not have the resources or experience to manage a large Wide Area Network (WAN). Vodat has approximately 40 employees and houses its equipment at two data centers. Some of the services Vodat offers to its customers using Huawei-provided solutions include:

  • Managed network services: A secure and proactively managed MPLS network. A typical Vodat customer will be provided with fiber Ethernet-grade circuits to HQ and distribution offices, and ADSL or FTTC services to each retail location
  • Managed Internet services: Secure, managed and monitored Internet access for retail locations
  • Managed firewall: An optional add-on to managed network services
  • Managed payment services: Chip and PIN facilities fully managed over their own MPLS network

Challenges

Prior to building its own network, Vodat had faced some key challenges by leasing MPLS services from UK carriers. This limited their ability to proactively manage the network. Instead of diagnosing line faults itself, Vodat was at the mercy of their telecom provider to inform them about (and repair) faults. Also, by leasing MPLS services, Vodat was limited in the bandwidth options it could offer customers. Finally, the resale of MPLS as had a negative impact on Vodat’s margins as the costs for leased services were significantly more expensive than only leasing unmanaged circuits (as Vodat does now).

Solution

For Vodat, the answer was to build and manage their own MPLS network using Vodat owned/managed switches and routers in conjunction with leased lines from major carriers.

In order to meet their customer requirements, Vodat created an innovative managed network solution for their retail clients, one that would allow them to easily connect numerous retail locations to all distribution and HQ offices, plus to each other. In order to build this network, Vodat needed an ICT vendor that could provide for the following requirements:

  • Scalable: Vodat needed to build a network that could grow with them, specifically as Vodat added new customers, and as their existing customers’ bandwidth requirements grew
  • Easy to monitor: Vodat’s unique selling point is to fully monitors its customers networks and will note and fix failures even before the customer notices a problem
  • Reliable: Vodat’s customers require reliability in order to successfully compete in the retail market. Failed connections have the potential to cause significant financial damage to their clients
  • Flexible: The network needs to work with devices and routers from multiple vendors
  • Excellent TCO: Vodat entered the managed services market by using leased MPLS services, but this resulted in lower than acceptable margins. To be successful financially, Vodat had to build and operate its own cost-effective network

Vodat spoke with a number of network equipment vendors, but only Huawei could offer the combination of performance, TCO and flexibility required.

“Huawei was the only vendor (at the time) that could provide us with an initial network that met our needs, but that could also grow with us. The Huawei product line was at the time very unique in that it had a range of routers where we could start small and increase the capacity of the network by adding new modules and upgrading the chassis, without having to rip out and replace every piece of equipment we had purchased previously.”

— Roy Reynolds, Technical Director, Vodat International

Huawei worked closely with Vodat to design and implement a managed network solution. The core network includes 3 Huawei NE40E Routers, 3 Huawei S9300 Routers, and 2 Huawei USG 5120 Managed Firewalls.

Benefits

For Vodat, a very significant (and perhaps surprising) benefit of working with Huawei was the deep support, customization and direct connections to Huawei’s R&D staff. Huawei’s innovative products are directly related to its commitment to R&D. In fact, over 45% (70,000) of Huawei’s employees are dedicated to R&D. As Vodat rolled out managed firewall services for its customers, they identified new features and functionalities that would enhance their services. Vodat turned to Huawei in the UK to make these suggestions, and soon were in direct to the Firewall R&D dept and were speaking to senior engineers. A number of the enhancements were adopted by Huawei for not only Vodat but the customer base worldwide.

“With the direct contact with Huawei engineers in UK and China, we had all the direct support we could ask for. And that has not changed. We still maintain direct contact with the various departments in Huawei, so if we need some help technically and commercially, we know the right people to speak to.”

— Roy Reynolds, Technical Director, Vodat International

Vodat business decision to build and operate its own network (rather than lease MPLS services from other carriers) was quite entrepreneurial, as the return on investment clearly required business growth. With this in mind, Vodat needed to build a flexible and scalable network, one that could start with adequate bandwidth and capacity, but not one that required an over-investment in upfront costs. Vodat required a network that could grow as their customer base grew. Huawei was the only competitor able to offer the scalability from the start, and within the Vodat’s overall budget.

“The ability for us to buy a core router that we could upgrade quickly with a new module was important to us. What we were looking for was something that was scalable and could grow with the business as network capacity increased. This did not exist with Huawei’s competitors when we built the network in 2010. With the Huawei range, if you start with a smaller NE40E router you can move up to a bigger one and take the modules with you to increase the capacity as you go.”

— Roy Reynolds, Technical Director, Vodat International

Vodat has also enjoyed excellent performance and flexibility from the Huawei solution. Downtime has been minimal, and failover times are sub-50 ms using Huawei routers. According to Roy Reynolds “Huawei had Bi-directional Forwarding Detection (BFD) before its competitors and we noticed as soon as we put the core network in, as it helped us detect failures and gave us sub 50 ms failover.”

In terms of inter-operability and flexibility, the Huawei network has worked very well with non-Huawei equipment installed at the edge of the Vodat network.

Finally, the overall TCO for the project was excellent and allowed Vodat to build out their network much more quickly and effectively than the competitive alternatives offered. Specifically, Vodat enjoyed the following cost savings over the life of the network:

  • Initial outlay: The Huawei solution’s initial network cost was 30% to 40% lower than competitive offers
  • Power consumption: Since power availability is quite limited for UK data centers, this was a major consideration for Vodat. The Huawei solution offered excellent power consumption
  • Training: According to Vodat, the training on Huawei equipment for its engineers was much less than expected. This was largely due to the ease of cross-training Vodat engineers that were already trained for other major networking vendors

The size of the Huawei solution was significantly less than competitors, which helped Vodat achieve significant cost savings due to the high costs of data center space in the UK.

“We can get more performance in a smaller box from Huawei. When you are paying for a single rack, if you can get a smaller unit that gives superior performance this is ideal. Huawei gives us a solution that is one-third the size of competitors and that uses less power. That is the type of device you need in facilities where rack space and power are expensive.”

— Roy Reynolds, Technical Director, Vodat International