PARTNER CHANNEL: Frame Relay is Ready for its Close Up

Posted: 11/2002

Frame Relay is Ready for its Close Up

By Tara Seals

FRAME RELAY, THE GRANDE DAME of wide area networking, is definitely over the hill by industry standards. However, like the aging silent film actress in Sunset Boulevard, frame relay is holding on to its glory--and its market share. New functionality for the technology is turning back the clock on legacy frame, much to the relief of cash-strapped end users and channel partners looking for new revenue streams.

Even though a few years ago everyone--service providers, analysts, industry watchers--predicted that frame soon would be part of a nostalgic past, revenue is still growing worldwide at a clip of 19 percent, according to Vertical Systems Group, and has 22 percent growth outside the United States. The market is worth about $12 billion in revenue, and that will reach $21 billion by 2004.

The reason for that is simple--with more than 1.2 million ports in use, according to Vertical Systems, many end users are reluctant to chuck that existing investment for the latest and greatest IP-centric networking options. So instead of starting over in a sluggish economy, they are enhancing their existing infrastructure.

"This type of economic environment that's out there, there's an investment and everyone's looking to leverage and maximize that investment," explains Joe Kimball, president of the Frame Relay Forum. "So frame relay is becoming a predominant player in the enterprise WAN space.

"IP-enabling the frame creates the connectivity you'd get with an IP VPN (virtual private network), creating flexibility for the end users," he adds.

Other developments include adoption over DSL, multilink frame that delivers T1s that customers can take add or drop as required and support for multilabel protocol switching (MPLS), which creates "any-to-any" protocol connectivity.

And the Oscar for Best Costume Goes to...

Souping up old image, service providers, including the big three long-distance carriers, offer frame a new look with snazzy IP outfits.

In what has become a popular new use for frame, WorldCom Inc.'s Private IP Service and AT&T Corp.'s IP-enabled Frame Relay allow customers to leverage existing frame relay investments by offering secure connections with quality of service (QoS) over frame, using it to connect to a VPN.

Earlier this year Sprint Corp. launched Intelligent Frame Relay, which also adds IP functionality to legacy systems, to support new applications while maintaining the reliability that comes with frame. "Right now isn't a time for WAN managers to be spending a lot of incremental money," explains Larry DeNayer, Sprint's group manager for frame. "People are continuing with their existing investment, and certain customers will continue to stick with the technology."

Intelligent Frame Relay is a hybrid solution. Sprint has frame-to-IP gateways that use the same frame equipment at the customer premise to change the WAN from a switched network to a routed private network at the core. "This offers some of those benefits of any-to-any, and it has a user-to-network interface that people feel comfortable with, it's Layer 2, it's secure and it lends itself to filling that space of users that have IP requirements but don't need a full-blown IP VPN," says DeNayer.

Another cost-savings for end users is ongoing management.

"If you start to give it any-to-any capability, and it's a secure solution with worldwide availability that supports different protocols," says Kimball, the ongoing management of frame relay becomes an attractive part of the package. "Unless you run out of bandwidth or have an application issue, it pretty much just runs," he says. "A midsize business may not have the budget to have all the people on staff to take care of the management and evaluation for new technology."

IP-enabled frame also serves a purpose in areas that may not have other broadband options. For instance, DSL provider New Edge Networks Inc. has introduced a new network solution that gives multilocation customers off-net connectivity at no extra circuit charge, to provide for remote offices where New Edge does not have its own equipment for providing broadband access. The carrier has created a blended data communications network from DSL, T1 and frame relay connections in different telephone calling areas, dubbed "Frame Link." New Edge is able to give complete coverage by leveraging its network-to-network interfaces with the regional Bell operating companies (RBOCs) and other carriers.

ISP customers, for example, can access Frame Link via their existing connections to New Edge, avoiding new costs to provide service to out-of-territory customers. New Edge provides a frame relay circuit for a virtual connection over its network back to the ISP partner's existing aggregation circuit. Without Frame Link, customers must coordinate installation with multiple service providers and face more expensive networking costs. The average cost per location for a traditional frame relay network could be more than double that of a blended network solution, says the company.

"Frame Link is another demonstration of our ongoing commitment to help our partners boost their sales and profits," says Dan Moffat, New Edge president and CEO. "It helps position our partners as a single source provider."

Business targets are those with multiple locations and high bandwidth requirements, such as banks, hospitals or retail outlets with point of sale and credit card verification needs.

Hooray for Relaywood

Just like Hollywood agents, channel partners know a good thing when they see it, and new frame options are offering them new sources of revenue from existing bases.

Sprint, which has offered frame relay since 1991, says the technology represents a multibillion-dollar revenue stream, totaling about 100,000 ports. DeNayer says there is still incremental demand, with a compound annual growth rate (CAGR) of 10 to 13 percent for the company over next three to five years.

"About 80 percent of our growth is attributable to existing customers-- add a site here, add a site there," he says. "Brand-new companies tend to cut straight to an IP solution."

Sprint is pushing its indirect channel to focus on Intelligent Frame Relay, along with VPNs. "We are wanting to focus our VARs in that space, and because of the access costs associated with frame we are hoping to drive more sales in the IP space," says Darlene Daude, group manager for Sprint Business' indirect channels divisions. "This is something new for a lot of the VARs, so we have training and Web seminars on the cost benefit of doing this, moving away from the traditional frame relay backbone."

Sometimes frame relay appeals to those brand-new companies too--especially small- to medium-sized businesses, says Kimball. "In channel marketing there's a downmarket move," he explains. "It's becoming commoditized as far as being easy to deploy and at smaller sites.

"VARs have done really well in that midsized movement, and as we see more DSL access to frame, we'll see VARs giving their customers a new option for intercompany networking," he adds.

Also, retail firms and brokerage houses with ATM machines and point-of-sale applications are not going to be ripping out their networks anytime soon.

"So we look for VARs that can transition their customers from traditional frame to IP IFR, and we'll put training around that and education on what are the industries that should be targets," says Daude.

High-end voice-over applications, such as call center VoIP, are also lucrative add-ons for agents and VARs to offer their frame relay customers. Kimball says IP-enabled frame is perfect for hot technologies.

"For some of the data solutions, especially voice over data applications, frame is really the ideal technology for that, with low latency, classes of service and then the whole security issue is helped by frame technology," he says.