Case Study: Global MPLSbased. Network

2005

MPLScon 2005

Welcome

Wednesday, May 18 2005

Case Study: Global

MPLS-based Outsourced

Network

Presented by:

MPLScon

2005

Hyatt International

Corporation

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Operates, manages or franchises 88 hotels

around the world with 23 more under

development

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Private company headquartered in Chicago and

majority owned by the Pritzker family (estimated

revenues approx. $3b). Family also owns Hyatt

Hotel group which runs 122 hotels in North

America and Caribbean

ƒ

Existing network was a combination of low

bandwidth FR services and private line services

(some ATM). Average bandwidth of 64k (range

16k to 256k) per site.

2005

Telstra Incorporated

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100% subsidiary of Telstra Corporation Limited.

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Telstra is a $15b revenue company headquartered in

Australia with operations in over 20 countries

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Telstra is ranked as the 13

_{largest carrier in the world by}

market cap providing voice, data and internet services in

over 55 countries

ƒ

Listed on three stock exchanges, 35000 employees,

services 200 of the Fortune 500

ƒ

50 years of experience in the Asia Pacific and considered

leader in the region for the Enterprise market

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Hyatt Business

Objectives

ƒ Take advantage of projected increase in hospitality business around the world

ƒHotel occupancy rates have improved 3-4% with the largest improvements being luxury hotels in tourist destinations and at downtown and airport chain hotels, which means business travel is expanding.

-Reed Research Group, July 2004

ƒHotel Broadband Market is taking off: Guests demand for broadband service is now seen as an essential element of the guestroom along with a bed, telephone, and TV.

ƒBroadband deployment on hotel properties will rise from a bit over 5,000 last year to almost 27,000.

- eMarket 2004

ƒ Provide state of the art services to its customers including in-room wireless internet access

ƒ Introduce advanced applications (external and in-house) to improve customer service, operations efficiency and financial reporting

ƒ Future proof its infrastructure to take advantage of latest technologies and applications seamlessly

ƒ Outsource all areas of non-core business without impacting customer service or operations

2005

Hyatt IT Team’s

Challenges

ƒ Replace a 6-year old FR network running at 64k and a

low-bandwidth IPL network running at 16k-64k: inadequate to handle proposed applications

ƒ Increase bandwidth at least 400% in order to meet company objectives (reduced budget)

ƒ Provide an infrastructure that would not be outdated or limited in its capability to seamlessly introduce new services or take

advantage of emerging technologies

ƒ Find the right balance in outsourcing components of its IT and Telecoms operations and infrastructure without losing identity and input to company goals

ƒ Reduce IT and Communications costs (not yet seen as part of core business)

ƒ Implement a network architecture that would allow greater flexibility without affecting existing operations

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Hyatt RFP

Requirements

ƒ Global integrator to provide them with a turnkey solution for their 88 existing hotels, shared service centers (SSC) and administrative offices

ƒ Replace existing network with a new design & infrastructure that would allow: meshing connectivity, voice and data integration, traffic flow control based on CoS and secure internet access

ƒ Compliance with stringent SLAs for performance, delivery and stewardship

ƒ Comprehensive account management and in-country support for hotel managers

ƒ Competitive pricing and cost containment (more for less)

ƒ Strict implementation timelines to avoid double billing

2005

Telstra Proposal

ƒ Telstra proposed a CoS FR solution and MPLS solution highlighting pros & cons of both services and provided the increased bandwidth requirements needed

ƒ MPLS solution proposed various classes of service to handle different applications (various options presented including future voice integration)

ƒ Migration process outlined (migration from existing vendor and Telstra existing services)

ƒ Proposed full turnkey solution including network services, CPE, 24x7 network management, off-net options and secure internet services

ƒ Customized SLAs per hotel with localized currency billing

ƒ Future services also proposed including Dial IP authentication services, WiMax services and enhanced extranet services

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The RFP Result

ƒ Telstra awarded network business ahead of 19 other network providers

ƒ The $8.4 million business covered all existing hotels including delivery of MPLS services, CPE provisioning, network

management, internet & firewall services

ƒ Implementation requirements extremely stringent including traditionally difficult locations in China (Beijing Hyatt) and Indonesia

ƒ Broadband internet solution for in-room clients including

wireless services awarded to another vendor (Telstra providing internal internet services)

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Why Telstra

succeeded?

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Existing relationship: supplier in Europe and Australia

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Compliance with pricing, SLAs and individual billing

requirements – saved Hyatt a lot of money

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Promotion of MPLS services and the communicated

advantages of using MPLS

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Recognized leader in the Asia Pacific: network capacity,

diversity and flexibility

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Global coverage and platform diversity (logical and

physical)

“Telstra was prepared to commit to robust SLAs and has more than met the reliability Hyatt was looking for,” stated,

Gebhard Rainer, Hyatt’s Vice President of Finance and Technology. “This gives us greater flexibility while maintaining the highest standards for the customer

experience.”

2005

Benefits of MPLS to

Hyatt

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New Property Management application

(ASP-based in Europe) would not require dedicated

bandwidth from each hotel

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Financial & Accounting applications could be

decentralized without increased cost

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Mission-critical reservation system not

compromised, guaranteed percentage of the

bandwidth (30%)

“MPLS Technologies drvie efficiency improvements while ASP services centralize hotel management functions, enabling Hyatt International to focus on its core business” –

Mark Retnam, Director of Global WAN Services

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Was MPLS really the answer?

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Customer wanted any-to-any but final design did not take

advantage of this (no hotel to hotel connection needed)

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MPLS design for Hyatt still configured as hub and spoke

to key admin and shared services sites

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Customer believed there were real future advantages with

MPLS investment

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Cost advantage of MPLS vs FR was 20% (in many cases

FR was cheaper for individual sites)

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Real value will come in future integration of new

applications and voice / data integration

2005

MPLS the right fit for

all ?

ƒ MPLS advantage dependent on industry, need and perception

ƒ For Asia Pacific region MPLS is twice as expensive as IPL services for high bandwidth (bandwidth continues to drop)

ƒ Voice integration is key advantage but take-up slow since (1) Decision makers within corporations are in different areas and (2) Cost of international voice has plummeted

ƒ MPLS advantageous in AP if bandwidth is below 512k and true meshing is needed (appealing to Fortune 3000 but not

Investment Banking Fortune 500)

ƒ Despite talk of any-to-any, most corporate intranets remain hub and spoke design

MPLScon 2005

MPLS in Asia

Pacific

Predicted Revenue for IP VPN Services in Asia Pacific

* Source: Frost & Sullivan 2004 IP VPN Report

2005

MPLS in Asia

Pacific

Factors Leading to MPLS Implementation or Migration

* Source: IDC Asia Pacific Enterprise Users Survey December 2002 3.69 Service Level Agreements 3.72 Geographic availability 3.80 Management and Monitoring Facilities 3.83 Pricing 4.22 Traffic and Transport

Security

Scale 1-5 (5 highest) Attribute

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2005

MPLS in the Asia Pacific

ƒ 50% of all telephone lines installed in the Asia Pacific in 2004 will

be pure IP -Gartner Group

ƒ Asia Pacific Enterprise Market will adopt IP Telephony at higher rates than rest of world

– Gartner Group

ƒ Currently for bandwidth above T1/E1 pricing of MPLS ports vs. IPL services is 2:1, by 2007 this will be 1:1

– 2004 Frost & Sullivan IP VPN Report

ƒ 50% of Asia’s Enterprises are planning to adopt IP Solutions in

2004 - AC

2005

50 Countries with scalable links from 64Kb/s to 155Mb/s

World Class Support

Intranet / Extranet / remote users Multiple CoS offering

Video Conference & VoIP Supported

Telstra’s MPLS: Global IP VPN

Save on cost, increase on efficiency

Telstra’s MPLS Virtual Private Network (VPN) delivers a cost effective solution to converge your corporate voice and data network on to a single IP – based network

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2005

Hong Kong Tokyo

Singapore New York San Francisco Los Angeles London Seoul Sydney Auckland Perth Taipei Manila Hong Kong Tokyo

Singapore New York San Francisco Los Angeles London Seoul Sydney Auckland Perth Taipei Manila

2005

Telstra Network Infrastructure

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Investments in over 50 cable systems globally

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Self-healing cable systems: APNC2, China-US, Japan-US,

Southern Cross, TAT, Apollo, other…..

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RNAL - wholly owned private cable connecting HK, Taiwan,

Japan and Korea

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Other major systems: AJC, SEAMEWE3, APCN, I2I, FLAG,

SAFE, TVH, HJK and Tasman 2 (EAC will become active Q4,

2004

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Largest Satellite Teleports in Asia (HK, Perth & Sydney)

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Largest IP backbone in Asia Pacific (internet peering with

all major players)

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Top Intra-Asia IP Backbone

Providers

* Telstra the largest with over 21Gbit/s of International

capacity

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The Telstra

Advantage

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Global coverage

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Asia Pacific expertise and

in-country support

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Platform diversity

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2005

QUESTIONS?

THANK YOU

Markos Moya

Vice President Commercial Enterprises

[email protected]