Carrier Channel: Using SLAs as Differentiators

Posted: 12/2002

Using SLAs as Differentiators

By Chris Luzine

IT’S
NO SECRET THAT WHOLESALE ISPs are searching for ways to grow their businesses
profitably. One of the best ways to accomplish this is to offer a unique set of
services that helps acquire and retain customers. As a result, wholesalers are
beginning to offer more stringent, unique and customized service level offerings
to their retail ISP customers.

Service level agreements (SLAs) are
strategic tools that enable service providers to offer distinct and measurable
business advantages to their customers. By creating a comprehensive set of
elements for customer SLAs, wholesalers can differentiate their own organization
and leverage their resources for maximum impact, while finding opportunities for
cost savings and added revenue.

One benefit of an SLA is that it
makes the customer aware there is a relationship between support and dollars. By
dividing an SLA into different performance levels, such as basic, enhanced or
premium, service providers can easily show customers the resource and cost
trade-offs required to achieve different levels of support, and give them the
option to pay for the level they need. SLAs can also be used as service
definition documents, identifying guaranteed deliverables that are mapped to
specific pricing schemes, such as port limits and quality of service (QoS)
elements.

But even more important may be the
trust relationship wholesalers can build with customers. Those that offer
comprehensive SLAs, live up to them and provide accurate and detailed
information on their compliance will give their retail customers the confidence
they need to extend these same standards to their own customers.

Understand What Retail ISPs Want

Aside from infrastructure guarantees
regarding latency, packet loss and throughput — which wholesalers already cover
in SLAs — what else can retailers offer to their users? First and foremost are
no busy signals and consistently successful logins.

And what do retail customers, in
turn, require for themselves? They want flexible services from wholesalers that
allow them to service their customers properly. They also want timely and
accurate billing and reconciliation so they can properly manage their
businesses.

Wholesalers can offer all of these
features to retailers by building a set of intelligent SLAs and backing them up
with the proper control and management systems, designed to give customers what
they need while helping wholesalers leverage existing resources.

* No Busy Signals. Many
retail ISPs promise their customers service that includes no busy signals or a
guarantee of a high completion percentage, such as 95 percent. To give them this
ability, wholesalers can reserve a set number of ports exclusively for the ISP,
and build an appropriate billing scheme for this premium service. The proper
approach to this is to allocate virtual, not physical, ports, so that
wholesalers can maximize the use of their ports (and avoid the cost of idle
ports), while ensuring that retailers receive the SLA for their port
reservation.

* "Soft" with Peak
Premiums. Many retail ISPs want a minimum number of ports available to them
— and usually want to be able to use more ports in peak times. One strategy is
to attach a premium to overages in peak times, and ensure that more ports are
available to the customer as usage dictates. This premium guarantees that
wholesalers reap benefits of peak usage, while giving retailers the ability to
be responsive to the needs of their users.

* "Hard" Limits to
Ensure Port Availability. A hard limit is a cap on how many ports a customer
can use at any given time. For retail ISPs, this can be a critical element.
That’s because they’re paying a premium for ports above their soft limit and
unlimited extra users could set them up to incur unexpected costs. To avoid
this, wholesalers should set a realistic cap so retailers can control their
costs. A wholesaler also must place hard limits on retail customers to protect
its own network resources — the wholesaler cannot allow one retail customer to
monopolize ports that are promised under an SLA to other retail customers.

* Regional Port Allocation.
In all of the above port allocation scenarios, wholesalers can take their SLAs
one step further by allocating ports on a regional basis in order to serve
retailers’ population densities appropriately. By allocating ports based on user
populations, wholesalers can establish the proper concentration of users to
ports, ensuring that they can meet SLAs.

* IP Address Management.
Assigning, managing and reclaiming IP addresses can be a challenging and
expensive proposition, unless wholesalers manage their IP addresses effectively.
A large wholesaler may have more than 1,000 network access servers (NAS).
Managing IP addresses as separate pools on each NAS is expensive and prone to
error. IP addresses are unwittingly duplicated and sometimes lost altogether.
Centralized IP address management can help wholesalers control costs and reduce
provisioning errors. Centralized IP address management also makes it possible to
apply policy when assigning an IP address to a user. For example, an IP address
can be used to identify a subscriber as belonging to a particular retail
customer, deserving of a particular throughput or entitled to access a
particular service.

* User Pre-authentication.
Wholesalers should employ pre-authentication to help them save money.
Pre-authentication helps service providers identify authentication failures
sooner. This has the effect of freeing the trunk circuit before modem training,
LCP negotiation and credential collection takes place. By shaving seconds off
each ineffective attempt, a wholesaler requires fewer ports to achieve a certain
grade of service. Pre-authentication occurs before the NAS even answers the call
— giving wholesalers the opportunity to apply port quotas based on the number
called.

* Authorization Systems.
Authorization systems can be used for more than just authorizing users.
Wholesalers can leverage them to ensure they provide consistent, accurate
service for retail customers and end-users.

One such way is to ensure that users
are dialing a number belonging to the retail ISP they eventually log into. This
is necessary because port quotas are based on the called number, whereas the
authentication is based on the user name, domain and password supplied by the
user. If the called number and the domain are not cross-checked, shrewd users
can bypass port quotas by supplying their normal credentials after dialing a
competing retail ISP’s number.

Another consideration is the
fraudulent sharing of a single-user account. Wholesalers need to control account
sharing. In some cases they may wish to offer it as an option, especially for
users working in the office as well as at home. But more often, they will want
to ensure a single account is used by one individual. This should be set up as
part of the authorization scheme, so the number of simultaneous sessions can be
identified before the user is connected.

These processes can be critical to
helping wholesalers deliver SLAs and control costs. Losing ports to unauthorized
users could defeat a wholesaler’s port availability scheme, making it difficult
to meet SLAs based on accessibility.

Measure & Document
Performance

Offering SLAs is only one part of
the equation: Wholesalers also must prove they are delivering on their promise
by documenting historical performance and trapping customer-specific information
for proper billing. Measuring SLA performance must be easy and automated.

In order to document and bill for
SLA compliance, wholesalers should employ management systems to provide the
following reporting elements: A system should be able to capture usage data and
correlate and aggregate it into a single session record, identifying the
subscriber and the ISP, as well as the duration of the session. Usage data
should include all elements that identify adherence to SLAs, plus those that
require specialized billing.

A system also should be able to
stream these records to ISP customers in real time, followed by a summary. Daily
summaries are most attractive, as they ensure that anomalies or missing
accounting records are quickly caught and dealt with. They also help customers
understand their usage costs day-over-day, which can help them more effectively
manage their business. Plus, they give wholesalers the ability to document SLA
compliance on a daily basis, improving customer trust in a wholesaler’s service.

The system should also be able to
detect when these accounting records are not received, and store sufficient
information to rebuild the record.

Deploy a Management System

A major consideration for
wholesalers offering fast, efficient service to ISP customers is the deployment
of a highly scalable control system in their central site(s) and points of
presence (PoPs). They should ensure the system meets current SLA requirements
and scales to keep pace with a growing business.

Solutions should be able to grow
incrementally as a wholesaler grows, with no limits.

The system should have a redundant,
load- sharing architecture to provide maximum reliability of systems — ensuring
that a failure doesn’t affect a wholesaler’s ability to meet SLAs.

The physically distributed system
should be centrally managed to minimize administrative costs.

Products that complement basic AAA
can provide the flexibility to create and manage distinctive SLAs. Such systems
include IP address managers, port allocation systems and accounting systems.

Management systems should work with
network elements from all the major vendors. This allows wholesalers to choose
the best solution for their needs, and to provision new services much more
quickly.

Far from being a catchall term for
meeting minimal requirements, the SLA is rapidly transforming into a strategic
business tool. To attract and maintain customers, wholesalers must be prepared
to offer SLAs that give their retail customers the service they require to build
a competitive edge.

By creating SLAs based on
intelligent management of resources, wholesalers can create competitive
differentiators that will help them build customer loyalty and leverage
resources for maximum impact and profitability.

Chris Luzine is product manager
for Bridgewater Systems Corp., a provider of IP network, service and access
control solutions to service providers.