Leading organizations have already outsourced a major chunk of IT services and have tested and proved that outsourcing and off-shoring works. Now organizations are clearly focusing on outsourcing their business processes to a specialist as they feel that most transactional activities done today are non core in nature. With current technology advancements in internet and security it has become easier to manage and execute business processes from any part of the world where good infrastructure is available. So this has become an increasing focus area for CXO’s to carve out core and non core activities within a process and outsource through a managed services model using captive or third party providers. In this current economic situation companies seeking to improve their fi nancial performance have already started looking Business Process Outsourcing as a key enabler in streamlining business processes and also improving operational performance. While F&A and HR outsourcing have been around for quite sometime, procurement outsourcing is becoming increasingly accepted as a more viable strategy for both cost and performance improvements. The current trend clearly shows that companies are pursuing procurement outsourcing using as an incremental approach to test and prove the concept works. This is similar to what happened in 1940’s when manufacturing companies started focusing on core manufacturing of key components and also on designing, development and marketing and outsourced all other component manufacturing to specialists. A concept of moving from “Vertically Integrated Supply Chain to Virtually Integrated Supply Chain”

1.
VIDEO CONFERENCING
NETWORK ISSUES:
COSTS & OPTIONS
Prepared By:
S. Ann Earon, Ph.D.,
President Telemanagement
Resources International Inc.
Sponsored by Vidyo

2. Video Conferencing Network Issues: Costs & Options By: S. Ann Earon, Ph.D.
Introduction
Successful video conferencing is dependent on having a network robust enough to
handle the demands video places on it. Historically, video conferencing has not
tolerated network problems very well. Calls have been dropped, pictures have become
unclear, and information has been lost. Some traditional solutions adapt to a limited
amount of packet loss (loss of information) by employing error resiliency algorithms, but
only work well in like-to-like video calls and typically add a tremendous overhead to the
data stream, consuming even more bandwidth. Other video conferencing systems have
no ability to compensate for network issues. To overcome these problems, many
customers use networks with a high level of quality of service (QoS). But high QoS
bandwidth is expensive. Recently, a new breed of video conferencing solutions has
emerged based upon Scalable Video Coding (SVC), an extension of the H.264 video
compression standard, which is inherently error resilient and performs well over general
purpose IP networks.
The network challenge becomes even more pronounced as the number of video
conferencing endpoints grows by an order of magnitude with the shift from room based
to desktop and personal device based deployment strategies. With ongoing operating
costs typically representing twice the amount of the initial investment and maintenance
in deploying a video conferencing system, video conferencing solutions and
architectures that are designed to minimize the cost of the networks required to support
them will emerge as the leaders of the next generation of video conferencing.
The costs and options of various types of networks are explored in this paper in the
context of their impact on the economics of video conferencing solutions.
QoS Options & Topologies
Bandwidth availability is an integral part of QoS. Each link of the network needs to have
sufficient bandwidth to support the voice and video traffic expected, as well as the
existing data applications that use those same connections. As video conferencing has
evolved, organizations have begun deploying increased bandwidth to benefit from high
definition video quality. Traditional video conferencing used 128 Kbps or 384 Kbps of
bandwidth, while high definition systems can use as much as 4 - 6 Mbps for voice and
video transport. Over time, traditional video conferencing networks have migrated from
ISDN (integrated services digital networks) only, to converged IP or IP overlay networks.
All video conferencing traffic is real-time traffic and has traditionally needed proper QoS
support both in the local area network (LAN) and the wide area network (WAN). High
definition video conferencing has the same needs as standard video conferencing traffic,
but with higher bandwidth requirements. As the demand for remote desktop users
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3. Video Conferencing Network Issues: Costs & Options By: S. Ann Earon, Ph.D.
grows, the demand for bandwidth will accelerate rapidly. Many organizations use a wide
area network service provider to connect locations.
Network Service Providers (NSP) address the demand for video conferencing using a
variety of QoS techniques. These include:
• MPLS (Multi Protocol Label Switching) – MPLS allows the service provider to
configure the appropriate bandwidth and offer classes of service to support the
needs of high bandwidth, real-time data flow. Packets are labeled with specific
routing and delivery parameters which results in faster throughput for priority data.
• RSVP (Reservation Protocol) – RSVP allows the reservation of network resources
in each node, creating a reserved end-to-end path for the data to travel.
• DiffServ (Differential Service) – DiffServ prioritizes certain types of traffic over
others, resulting in decreased packet loss, faster handling, and more consistent
throughput.
Virtual Private Networks (VPN) are often used by small or medium sized organizations
to connect their geographically disbursed offices. The cost of a VPN is often much less
than a dedicated connection, but considerably more than basic internet connectivity.
VPNs are available that connect two offices through a single WAN provider or those that
use the open Internet, meaning they may use more than one service provider. Carrying
real-time traffic through these open Internet VPNs can be risky for traditional H.323 or
SIP based video conferencing solutions because there is usually no QoS capability
offered. Using the Internet for real-time traffic carries the same risks for these traditional
solutions as the VPN, but with less control.
There are two types of networks organizations typically deploy for video conferencing.
Converged networks are those where both data traffic and real-time voice and video
traffic are being supported concurrently. Dedicated, or overlay networks, carry only real-
time traffic and are physically separate from the general purpose data network.
If a network analysis indicates there is insufficient bandwidth to support video
conferencing deployment there are a few options to resolve the conflict:
• Limit Conferencing Traffic
• Upgrade Bandwidth
• Scalable Video Coding
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4. Video Conferencing Network Issues: Costs & Options By: S. Ann Earon, Ph.D.
Limit Conferencing Traffic
First, the bandwidth used by video conferencing calls can be limited. While better HD
video quality can be obtained at 4 Mbps, good quality video can be obtained down to
1 Mbps. It is important to test viewer reaction to lowering the bandwidth. Another way
to reduce demand is to manage call volume so a limited number of calls can occur
simultaneously. If an office has three video conferencing units, but only two calls can be
supported simultaneously, a scheduling policy can be put in place to insure only two
systems are used concurrently. A gatekeeper can also be used to manage bandwidth
usage. The gatekeeper can control the maximum amount of real-time traffic allowed and
refuse additional call requests, acting like a busy signal. This strategy and approach has
been employed with some success in the room-based paradigm where a relatively small
number of systems were each used an average of 10 hours per month. For
organizations shifting to wide scale desktop deployment, the increased number of
endpoints, combined with the higher utilization rate per endpoint, renders this approach
obsolete. When access is limited, utilization drops and the value that was supposed to
be gained by having video conferencing is lost by those rejected calls.
Bandwidth Upgrade
If insufficient bandwidth is available for video conferencing traffic, the only solution may
be upgrading the amount of bandwidth. Performing an analysis of your network is
crucial to ensuring enough bandwidth is deployed to meet your communication needs.
This becomes particularly important as you grow the number of video endpoints on the
network through desktop deployment.
Scalable Video Coding
Scalable Video Coding (SVC) is an extension to the H.264 video codec standard that is
used by next generation video conferencing devices. SVC technology allows video
conferencing devices to send and receive multi-layered video streams. Paired with the
right architecture, layering provides a dramatically higher degree of error resiliency and
video quality with no significant need for higher bandwidth, unlike Forward Error
Correction (FEC) employed by traditional video conferencing solutions which can
consume nearly twice the bandwidth. Dynamic transrating (adjustment of frame rate)
and resolution matching (adjustment of image detail) are made possible via temporal
and spatial layers, making error concealment a real-time and transparent operation from
the user’s perspective. As a result, a properly implemented SVC solution eliminates the
need for QoS enhanced or overlay networks and performs well over converged, general
purpose IP networks.
It is important to note there are three levels of MPLS – basic, enhanced and premium.
Traditionally, video conferencing has been allocated to premium, which is typically $10 -
$20 more expensive per Mbps per month. Most enterprises have a basic MPLS pipe to
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5. Video Conferencing Network Issues: Costs & Options By: S. Ann Earon, Ph.D.
provide secure file transfers between locations. The key issue is that the premium
bandwidth in the MPLS pipe sits idle when video conferencing is not in use. The
bandwidth cannot be dynamically adjusted between premium and basic based upon
relative demand and premium applications cannot use basic and basic applications
cannot use premium. This leads to having to over subscribe in terms of total bandwidth,
which results in a lot of waste. A video conferencing system that dynamically adapts to
packet loss and available bandwidth does not require premium MPLS and can run with
the rest of the basic MPLS applications on the same shared bandwidth.
Inter-Enterprise Network Connections
While it is possible to provision networks to handle voice, video and data within an
organization (intra-enterprise) and between its global sites, connecting between
organizations (inter-enterprise) presents new challenges for QoS dependent
architectures. Unfortunately, when data travels between networks the prioritization
benefits offered by QoS networks are typically lost as soon as the traffic crosses
different network boundaries. This is because QoS practices used by different service
providers vary greatly.
As a result, while organizations can deploy voice, video and data communications
throughout their global organizations, they must rely on a network service provider who
has a peering relationship with other networks if they wish to communicate with others
outside their organization, representing another layer of ongoing operating expense.
Cost Examples
The following chart shows how an organization might deploy video conferencing under
three scenarios using an MPLS network versus a general purpose IP pipe:
1. Room systems deployed in corporate offices
2. Room and desktop systems deployed in corporate offices
3. Room system deployed in corporate offices and desktop systems deployed in
home offices.
For purposes of the examples, assume the organization is connecting 5 sites at 3 Mbps
for one HD room system at each site and 1 Mbps for each of 25 HD desktop systems at
each site. A survey of seven tier one carriers revealed that competitive per month
pricing for 1Mbps of MPLS bandwidth in the US is $500, while comparable per month
pricing for 1Mbps of commodity Internet bandwidth is $5 – one hundred times less than
MPLS.
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6. Video Conferencing Network Issues: Costs & Options By: S. Ann Earon, Ph.D.
Scenario Cost of MPLS Bandwidth Cost of Commodity Notes
Internet Access
Bandwidth
Room systems $500/Mb x 3Mb/unit x 5 $5/Mb x 3Mb/unit x 5 Additional monthly
only units units MPLS fees may
= $7,500 per month = $125 per month include router
management and
port fees.
Room & desktop Rooms = $7,500 Rooms = $125 Notice that the
– in corporate (previous) (previous) MPLS network does
offices Desktop = $500/Mb x Desktop = $5/Mb x not scale well with
1Mb/unit x 125 units = 1Mb/unit x 125 units = large scale growth in
$62,500 $625 number of endpoints
Total = $70,000 per Total = $750 per
Month Month
Rooms in Rooms = $7,500 Rooms = $125 * Employees may
corporate offices (previous) (previous) use existing
& desktops in Desktop BW = $62,500 Desktop BW = $625 consumer grade bb
home offices DT Local loop = $1500 x DT Local loop = $30* x connection,
125 = $187,500 125 = $3,750 eliminating this cost
from IT budget.
Total = $275,500 per Total = $4,500 per ** Assumes one
month month room system
enables 20 users
Monthly Cost per User** Monthly Cost per Notice that the cost
= $1,225 User** = $20 difference is
exasperated by the
high and varying
cost of local loop
needed for MPLS.
Review of the chart indicates that QoS enhanced networks are not an economically
viable option for delivering wide scale distributed telepresence via the desktop. Rather
new architectures that provide HD quality video with low latency while taking full
advantage of error resiliency made possible by scalable video codingare necessary in
order to change the economics and deploy wide scale desktop video conferencing over
cost effective general-purpose IP networks. While the pricing above is US based, the
cost model becomes even more exaggerated in developing countries where local loop
costs may be 10x greater than those in the US and MPLS may not even be available.
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7. Video Conferencing Network Issues: Costs & Options By: S. Ann Earon, Ph.D.
Network Impacts for Remote Workers & Telecommuting
Telecommuting, the ability to work remotely, often from home, is a fast growing trend.
Video conferencing is a natural enhancement to telecommuting, allowing employees to
participate in meetings, give remote presentations and attend conferences without the
need to be physically present. Telecommuting is one of the driving forces behind the
shift to desktop video conferencing and presents a significant network challenge for any
video conferencing solution that cannot leverage employees’ existing broadband internet
connections without performance degradation. Having QoS enhanced lines connecting
a handful of remote offices is expensive, but attempting to connect thousands of
employee home offices via QoS enhanced lines is cost prohibitive as illustrated in the
table above.
Conclusion
From Gartner and Frost & Sullivan to the majority of the video conferencing vendors, the
industry agrees that explosive growth of video conferencing endpoints is going to occur
at the mobile desktop over the next five years. This growth will accelerate the demand
for bandwidth as users will expect high quality resolutions that will be made possible by
higher quality cameras and higher processing power on desktop computers. Given that
meetings among participants are likely to include WAN & LAN participants, the solution
must work at times on best effort delivery networks such as the Internet.
This growth is going to force IT organizations to rethink their video conferencing
architecture and the networks required to support it, as the demand for bandwidth grows
by an order of magnitude along with the number of remote locations that will need to be
connected. The cost premium of QoS enhanced networks over general purpose IP
networks is as much as two orders of magnitude. This cost differential alone will compel
organizations to pursue next generation video conferencing solutions that leverage
scalable video coding to consistently deliver the quality video experiences users demand
over general purpose IP networks.
About the Author:
S. Ann Earon, Ph.D. is president of Telemanagement Resources International Inc. (TRI),
a 27-year-old consulting practice specializing in marketing, communications and training
with an emphasis on market research, assessment, design, project management,
promotions, and training for collaborative conferencing (audio, web, video ) and
telepresence systems. Dr. Earon is the Founding Chairperson of the Interactive
Multimedia & Collaborative Communications Alliance (IMCCA) the non-profit industry
association for conferencing & collaborative communications and Editor of IT AV Report.
Ann can be reached at annearon@aol.com.
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