IZO Internet WAN from Tata

Communications
Enterprise networking for the cloud age

Publication Date: 30 Apr 2015

Peter Hall

Product code: TE0005-000708

IZO Internet WAN from Tata Communications

Summary
In brief
The migration of IT to the cloud is generating new requirements on enterprise networking and Ovum
expects it to prompt a new phase of evolution in enterprise networking technologies. IZO Internet
WAN from Tata Communications is a new networking solution that has been designed for WAN
communications in the cloud age. It exploits the ubiquity and scale of public Internet connectivity yet
provides the predictable performance levels that enterprises have become used to with WANs based
on IP-MPLS VPN or Ethernet technologies. IZO Internet WAN brings benefits such as reduced costs,
global reach, and massive scalability, while addressing the demanding performance levels required as
more and more business applications reach for the cloud.

Ovum view

We are seeing a rapid growth in cloud deployment by large enterprises across a wide variety
of business applications. The network is increasingly critical as more demanding applications
and workloads are migrated to the cloud. The current rapid growth in private and hybrid cloud
means that networking to support cloud transformation is more important than ever. Todays
networking technologies have served enterprises well for more than a decade, but they need
to evolve further to support the next phase of the evolution of IT to the cloud. This means that
networking will need to match the agility and scalability of the cloud model.

IZO from Tata Communications is a new cloud-enablement platform that offers a number of
components, including IZO Internet WAN, an important new addition to the enterprise WAN
solutions available to global enterprises. It is unique among global WAN solutions available
today in that it operates over the public Internet yet provides business-grade SLAs. Because
IZO Internet WAN is based on public IP it is able to scale cost-effectively in response to the
massive explosion in bandwidth that many global enterprises are experiencing. In many
circumstances it is also able to provide a significantly more cost-effective WAN solution than
MPLS VPN or Ethernet VPN for enterprises.

An important component of the IZO concept is that it is cloud ready in that it has
interconnection with leading global cloud computing players such as Amazon Web Services,
Microsoft Azure, and Google Cloud.

IZO Internet WAN availability is currently limited to 34 countries (and more than 500 cities)
where Tata Communications has recruited delivery partners. However, a major effort is
underway to recruit other partners and expansion to over a hundred countries is anticipated
by 2016.

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IZO Internet WAN from Tata Communications

Market dynamics
The migration of IT to the cloud
The growth of private and hybrid cloud
The migration of IT to the cloud has been rapidly gaining momentum and is now unstoppable. In 2014
Ovum surveyed enterprises with more than 1,000 employees across 15 countries and their response
indicates that adoption of public and private infrastructure-as-a-service (IaaS) is already high and is
set to grow rapidly in the next 24 months. Figure 1 shows that more than half of large enterprises
already use public cloud and that 36% and 42% respectively use the main types of private cloud
managed in the enterprise datacenter by a third party or hosted by a third party in its own datacenter.
In addition, almost a quarter are using a managed hybrid cloud model.
Respondents anticipate very high growth in cloud adoption in the next 12 and 24 months. In 24
months each of these cloud models is expected to be adopted by more than 80% of large enterprises.
The expected high growth in private cloud is particularly interesting because it reflects a maturing of
the cloud market, and the underlying IT workloads running in the cloud, given the demands for greater
security and performance from a private cloud environment. The rapid expected growth of hybrid
cloud model is particularly striking and reflects greater sophistication in terms of maximizing the
potential of the cloud model.
Figure 1: Enterprise adoption of IaaS

Source: Ovum

Drivers and barriers to cloud adoption

There are several primary drivers in the move to the cloud. Businesses increasingly demand more
agility in deploying new IT resources and the cloud can enable new business applications to be
delivered more rapidly and with fewer demands on in-house specialist resource. Cloud services can
also address short-term demands or fluctuations in demand for IT resources. This has become a
popular application for hybrid clouds, which can supplement internal datacenter resources with

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IZO Internet WAN from Tata Communications

external cloud resources according to customer demand. Business continuity and disaster recovery is
often an early key driver of cloud adoption for enterprises through the use of backup and recovery
applications. The potential to reduce overall IT costs is, of course, also a driver, though as cloud
migration matures is less often a primary driver.
The key barriers to cloud deployment are security and regulatory/compliance issues. As a result of
these concerns, many enterprises have been cautious in terms of the workloads they have migrated
to the cloud. This is especially the case in industries such as finance and healthcare, where regulatory
compliance is often a major undertaking. Concerns regarding the performance of applications in the
cloud can also be a barrier, especially because enterprises want to deploy applications with more
demanding performance requirements in the cloud real-time applications, for example.
However, businesses increasingly realize that the cloud is the future of IT. It offers the kind of flexibility
and agility in responding to business demands that was rarely possible with traditional IT. This is
reflected in both the depth and breadth of the cloud deployments that we are now seeing, in particular
for large enterprises. Figure 2 illustrates the current workloads/applications that large enterprises are
running in the cloud and how this is expected to change in the next one to two years. It shows that
very high growth in cloud deployment can be expected across the core applications that most large
enterprises depend upon. It also shows that the workloads and applications that have the lowest
deployment today are expected to see rapid growth. A good example is custom/industry-specific
applications, which in general have been slow to migrate to the cloud but are expected to catch up
quickly.

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IZO Internet WAN from Tata Communications

Figure 2: Workloads/applications run in the cloud

Source: Ovum

Enterprise networking for the cloud age

Todays enterprise networking
Almost all large enterprises depend upon a WAN for communication between their headquarters,
branch offices, and corporate datacenters. A small number of key technologies are used for the
majority of WAN communications and most large enterprises use more than one of these
technologies. Figure 3 illustrates the main WAN technologies deployed by a sample of 1,380 large
enterprises across 15 countries. Note that the chart does not reflect the overall share of technologies
across sites. MPLS and IPsec VPNs are widely used in branch office connectivity, which can run to
hundreds or thousands of sites, and Ethernet is more widely used for connectivity to headquarters
and datacenter sites.
These technologies have served enterprises well for more than a decade. MPLS and Ethernet VPNs
provide high-performance connectivity and SLAs for networked business-critical applications. They
can also be used for connectivity with cloud service providers, although today this is largely limited to
the cloud services delivered by telcos. In general, the importance of the network has been neglected
by many enterprises with early deployments of cloud services. However, as cloud deployments move
to the private cloud model, and with the growth of business-critical workloads in the cloud, the network

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IZO Internet WAN from Tata Communications

becomes a key factor in providing predictable cloud application performance. Businesses increasingly
recognize that the performance of a cloud deployment is only as good as the network that delivers it.
Figure 3: WAN technologies used by large enterprises

Source: Ovum

The cloud model places new demands on enterprise networking

The cloud model is presenting new challenges for enterprise networking. Agility and scalability are
fundamental to the cloud model, but are not necessarily strengths of todays networking technologies
such as MPLS VPN and carrier Ethernet. In addition, security is becoming more important than ever
and the inherent security provided by these current technologies (which lack encryption as a standard
feature) will increasingly be seen as inadequate for many cloud use cases. In terms of agility and
capability the public Internet would be the ideal network for cloud services, but it falls down greatly
when it comes to predicable performance and security. IPsec VPNs over the public Internet add
security but do not offer predicable performance, and SLAs are weak at best.
Deploying technologies such as Ethernet to interconnect the enterprise datacenter with the cloud
providers datacenter leads to inefficiency in delivering applications throughout the enterprise because
doing so adds to traffic on the enterprise WAN. The ideal solution would deliver applications direct
from the cloud provider to the customer sites that consume the applications. This will become a
greater issue with the growth of BYOD and the Internet of Things (IoT) and the huge proliferation of
devices that also need to connect with cloud applications. In summary, the limitations of the current
WAN technologies will only increase as the use of cloud by enterprises becomes ever more
pervasive.

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IZO Internet WAN from Tata Communications

Enterprises expect to source advanced networking from their cloud provider

Cloud providers have been slow to provide business-grade networking solutions alongside their cloud
service offers. This is in part because much of the early interest in cloud services has been around
public cloud, where the public Internet fulfills most of the networking requirements. Of course, the
major telcos have provided a full range of business-grade networking solutions alongside their own
cloud computing offers. However, even the largest of the pure-play cloud providers have offered very
limited advanced networking generally nothing beyond Ethernet private lines.
Figure 4 indicates that enterprises expect enterprise-grade network services from their cloud provider;
more than 50% of respondents rate this as very important. In addition, more than 40% of enterprises
consider end-to-end SLAs (across networks and cloud platforms) to be very important, in spite of
virtually no cloud providers offering this today.
Figure 4: Additional features expected of cloud provider

Source: Ovum

Description of IZO cloud enablement platform

Overview
The IZO suite of services is an important step toward the next generation of cloud-ready WAN
services. IZO itself is a global platform built upon Tata Communications global tier-1 IP network,
which Dyn Research placed in the top five of its global rankings in 2014. The IZO platform combines
public Internet that has been reengineered to provide predictable routing with Tata Communications
global MPLS and Ethernet networks, which it claims span more than 190 countries. In addition, Tata
Communications has built an ecosystem of 20 network provider partners that can originate and
terminate enterprise traffic in 34 countries. The company reports that this partner ecosystem is

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IZO Internet WAN from Tata Communications

expected to grow to more than 100 network providers by the end of 2016. In addition, the platform
connects to more than 50 datacenters around the world, including those of Amazon Web Services,
Microsoft Azure, and Google Cloud.

IZO Internet WAN

IZO Internet WAN is a global service that runs over Tata Communications global IP backbone and
provides modified Internet services in conjunction with local/regional partners. The modification is a
very important one because, unlike normal public Internet traffic, the IZO service provides
deterministic routing so that all traffic sees predictable performance across the network. This means
that end-to-end performance is predictable and end to-end SLAs, comparable with those offered in
MPLS VPN networks, are supported. Working with network partners, the deterministic routing and
hence predicable performance, extends to 34 countries and more than 500 cities. Figure 5 illustrates
how partner networks combine with the Tata Communications global IP backbone to provide
deterministic routing.
Tata Communications claims that IZO Internet WAN offers a significant reduction in networking cost
relative to MPLS VPN for the enterprise. It quotes a figure of 30% as a typical saving for
multi-locational and multi-regional requirements.
Figure 5: Predictable routing over public Internet

Source: Tata Communications

Table 1 illustrates how IZO Internet WAN SLAs compare with those of MPLS VPNs through examples
of SLA parameters for different selected routes. The table shows that SLA parameters are very similar
between MPLS VPN and IZO Internet WAN for round-trip delay and packet-delivery ratio, the key
parameters that impact the performance of most traditional business applications over the WAN. IZO
Internet WAN does not offer an SLA for jitter performance; although jitter mainly applies to real-time
applications such as voice and video, this may be an issue for enterprises with a convergent WAN
that supports these applications. However, enterprises that currently run voice over the public Internet
will see an improvement in performance if they deploy IZO Internet WAN.

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IZO Internet WAN from Tata Communications

Table 1: Examples of SLA parameters: MPLS VPN vs IZO Internet WAN

Route

Round-trip Packet-delivery
delay
ratio

Jitter (one way)

MPLS (typical)

IZO

MPLS (typical)

IZO

MPLS (typical)

IZO

83ms

85ms

99.80%

99.70%

3.5ms

n/a

New
YorkTokyo

190ms

195ms

99.80%

99.70%

4.5ms

n/a

LondonTokyo

270ms

280ms

99.80%

99.70%

5.0ms

n/a

New
YorkLondon

Source: Ovum

IZO Private
IZO Private is a connectivity service linking enterprises with leading global cloud service providers. It
uses traditional enterprise networking technologies such as MPLS VPN and Ethernet to connect with
global cloud service providers such as Amazon Web Services and Microsoft Azure. The service offers
enterprises a single connection into the IZO network for access to multiple global cloud providers with
end-to-end management, guaranteed throughput and availability SLAs, and a single global
relationship with a single bill.

IZO Public
IZO Public is a cloud-enablement service that gives enterprise customers the ability to tag data
packets for business-class service and prioritized delivery over the public Internet. It also improves
performance when connecting to cloud service providers such as the Google Cloud Platform. In
addition, it allows cloud providers (e.g., SaaS providers) to offer their enterprise customers enhanced
quality of service and performance reporting for application delivery.
IZO value-added services
IZO also offers several optional value-added services to supplement the above services. These
include advanced reporting, managed encryption, and WAN optimization.

SWOT analysis
Strengths
IZO Internet WAN is a new solution from a major global IP network player
IZO Internet WAN is a new solution designed from the ground up by a major global telecoms player.
Tata Communications has one of the worlds largest global IP backbones, which gives it the
opportunity and skills to develop a new global platform for enterprise networking. It is unique in
providing business-grade end-to-end SLAs across the public Internet beyond the reach of the telcos
own Internet backbone.

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IZO Internet WAN from Tata Communications

Tata Communications can be aggressive in promoting IZO

Although Tata Communications is itself a significant global player in enterprise MPLS VPN and
Ethernet network services it is willing to promote a new solution that offers benefits to customers but
potentially threatens its own MPLS VPN and Ethernet revenues.

Tata is already a partner to many of the worlds leading cloud and hosting
players
Tata Communications global IP background means it has close relationships with most of the worlds
leading cloud and hosting players. This puts it in a strong position to strike partnerships with leading
players.

Weaknesses
Tata IZO is a new solution and has to prove its merits
Large enterprises tend to be quite conservative in deploying new technologies and many will either
disregard a new solution or wait until it is well established before giving it due consideration. Tata will
need to obtain some early wins with high-profile enterprise customers in order to raise IZOs profile
against a background of many new technologies wanting the attention of CIOs.

IZO is dependent on delivery partners for its success

IZO is reliant on an expanding ecosystem of delivery partners. Tata Communications is going to
impressive lengths to qualify suitable partners and bring them on board, including providing
engineering support. However, partners tend to be local and regional ISPs and it remains to be seen
whether they can play a key role in delivering services to global enterprises.

IZO Internet WAN may not be well suited to convergent WANs supporting
cloud-based real-time applications
We are seeing a growth in the use of cloud technologies for enterprise real-time applications such as
unified communications, including voice and video. These place greater performance demands on
networking and the absence of an SLA for network jitter may limit its use.

Opportunities
The move from public cloud to private and hybrid cloud will drive the need for
new network solutions
The time is right for a new solution such as IZO. The enterprise cloud computing market is growing
quickly and moving from public cloud to private and hybrid cloud, increasing the demand on
networking. In addition, the large global cloud providers themselves are realizing that networking
needs to be a more prominent component of their offer. Tata Communications is already well known to
most of them and IZO has arrived on the scene at the right time to meet this need.

IZO may be able to exploit the emergence of IoT

IoT is set to become a huge new opportunity for mobile and fixed networking providers. The
combination of public Internet scalability and assured service levels could prove attractive for IoT
applications and give Tata Communications a head start in a new generation of networking solutions
to support global IoT.

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IZO Internet WAN from Tata Communications

Threats
Major global competitors may be able to replicate parts of the IZO proposition
Global telco players such as Verizon are already able to address some aspects of the IZO proposition
(e.g., Verizon provides aspects of IZO Private). They could expand this and potentially even replicate
major components of the proposition. Whether they do so may depend on IZOs early traction early
market success could attract competition from strong global players.

There are alternative approaches to addressing aspects of the proposition

IZO Internet WAN represents a further evolution of managed network services in providing new
networking options for enterprises. However, alternative approaches are also evolving Cisco IWAN
(Intelligent WAN), for example. This is to a large part a CPE approach, where additional intelligence in
enterprise routers can examine network traffic and applications and decide which network resources
should be brought to play. This can include the type of network (e.g., MPLS VPN or public Internet),
whether acceleration should be applied, the use of connections to external resources such as Akamai,
security considerations, and even local storage and datacenter services incorporated in the enterprise
router.

Appendix
Methodology
Key to research for this report was a large-scale enterprise end-user global survey conducted in
mid-2014 regarding deployment, plans, and selection criteria for both enterprise networking and cloud
computing.

Author
Peter Hall, Principal Analyst, Enterprise Services
peter.hall@ovum.com

Ovum Consulting
We hope that this analysis will help you make informed and imaginative business decisions. If you
have further requirements, Ovums consulting team may be able to help you. For more information
about Ovums consulting capabilities, please contact us directly at consulting@ovum.com.

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