Private Fiber Networking

What do business, healthcare, and private equity IT have in common? Nothing and everything.  On first glance, they are as a disparate as the audiences they serve. Business is first and foremost a profit-driven enterprise (keep your costs low, your systems efficient, and your customers happy).  For non-profit healthcare, it’s all about providing quality and compassionate care and promoting the health of the community.  Private Equity investors want to quickly unlock the profit potential of their investments, improve the bottom line, and sell.  The IT departments that support them share their disparate strategic visions.

THE COMMON LINK: BANDWIDTH

All three disciplines require an IT infrastructure that unites the organization and yet, they operate in a vacuum, often times thinking that their unique missions require unique solutions.  But to quote a wise, but unknown author, “Wise men learn by other men’s mistakes.”

All three will eventually suffer the consequences of increased data requirements that have outgrown an infrastructure.  New technologies often scream for increased bandwidth.  And sometimes it just makes more sense to outsource the entire enterprise.  

THREE EXAMPLES

  • A large, multi-location business is expanding faster than its 5 year old technology will allow.  They’ve doubled employee headcount and established their own call center to handle consumer needs.  They need a new VOIP phone system and network backbone to go with it but are concerned about controlling costs.
  • A burgeoning rural hospital system, already spending hundreds of thousands of dollars to implement an Electronic Medical Record system, finds that its infrastructure can’t support the real-time needs of radiology, data transfer between hospitals, clinics and medical offices, not to mention its disaster recovery procedures.
  • A middle market private equity firm invests in a business that it hopes to turn in three years.  The firm begins cutting costs but recognizes that the company will be far more marketable if it has an updated IT infrastructure with room for growth.

BECOMING YOUR OWN PHONE COMPANY

Depending on the location, the answer for all three may be a private or “dark” fiber network.  In essence, each organization connects its facilities by installing its own high speed pathway, bypassing the traditional network providers, and financing it over a 15 to 20 year period.  In the appropriate cases, monthly costs will actually go down and remain the same forever.  And the dark fiber will allow for virtually unlimited bandwidth for the foreseeable future.

Until now, the idea of a business or hospital system constructing its own private carrier, dark fiber network, would be considered a pipe dream.    The thought was that it’s too complicated, too expensive, and quite frankly, you can’t have carrier-level infrastructure without being a carrier.

But that’s simply not the case.  When the construction costs along with annual maintenance are run over a 10 to 20 year timeframe, the monthly costs are typically much less than CURRENT network spends. Further the dark fiber nature of the network essentially delivers more bandwidth than you’d ever use, meaning that as your capacity per site grows, you won’t pay more.

At its most basic level, a fiber plant is quite simple to manage. The optical equipment is far less complex than advanced routers and switches, and maintaining the outside plant (poles, conduits…) is done by firms that specialize in that service and are there 7x24x365 and offer the same level of immediate support that carriers have on their own critical optical networks.

And finally, you don’t need to be a carrier to own one of these networks.  Partnerships with companies who operate these private dedicated facilities are common, and eliminate all of the regulatory issues that may be relevant.

Dark fiber networks allow an institution to save up to 50% of their current network spend while providing nearly unlimited bandwidth.  Of particular note, is the revenue generating potential of these networks.  Most businesses that fit into the above mentioned categories, will use only about one fifth of the fiber network’s capacity.  It’s easy to envision the potential revenue available to an enterprise by interconnecting a number of affiliates and other customers with the same fiber facilities.

Desktop Virtualization, Cloud Storage, and Disaster Recovery have common solutions too.  So the next time you see someone selling something that says, “custom, just for you,” think twice.  A better mouse trap may have already been invented for someone else.

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