A well-known satellite broadband provider is hoping for a smooth landing in the terrestrial network services market.
Hughes Network Systems LLC, the Germantown, Md.-based satellite Internet access firm, this week is unveiling a new managed networking service that combines satellite connectivity with Direct Subscriber Line (DSL) and frame relay.
Looking to expand its potential customer base beyond large organizations with hundreds of branch locations like Blockbuster Inc. and Exxon Mobile Corp., Hughes recently created a standard set of tiered satellite service plans. They range from a basic plan for organizations that need only bandwidth for credit processing and other basic processes to more expensive offerings that support high-bandwidth enterprise networking. Previously, Hughes' service contracts were tailored for each customer.
The new announcement is meant to leverage those tiered service packages by enabling businesses to use a combination of satellite, DSL and frame relay to lower the cost of connectivity.
Mike Cook, Hughes' senior vice president for North America, said the company hopes to court cost-conscious organizations that never considered satellite-only services, such as small and midsized companies and organizations with just a few branch offices.
"If you have a 10-site network, then we have a plan for you," Cook said, adding that the mystique surrounding the availability and cost of satellite service has prevented some organizations from considering it. "We feel we're in a unique position to sit down with customers and deliver a network that's optimized for their businesses."
For instance, Cook said, since DSL service is typically cheaper than satellite, a customer could choose to use DSL at two-thirds of its locations where it is available, while using satellite service at other locations or for redundancy.
"If one [connectivity method] fails, the other is there to keep the network going," Cook said, "so it guarantees the customer near 100% availability."
Cook added that the combined services are also an effective way to deal with satellite transmission latency, which can range up to several hundred milliseconds. However, Hughes uses data compression and Web acceleration techniques to compensate.
Cook said exact pricing is determined by an organization's choice of different transport systems, as well as desired service levels and contract terms, but a combination offering could save an organization hundreds or even thousands of dollars per month depending on its number of locations.
Brian Washburn, principal analyst with Sterling, Va.-based research firm Current Analysis Inc., said Hughes' managed services offering isn't about to threaten major managed services providers like MCI and AT&T, but it could make satellite service attractive to more businesses.
"It's an absolute common sense move," Washburn said. "For Hughes to offer both satellite and terrestrial [services] under one roof is something customers expect. If they hadn't, customers would have gone out and started cobbling them together themselves."
Washburn added that Hughes has the expertise to successfully increase its presence in the network service management market since it has years of experience designing, building and managing custom networks.