Insider: Enterprises Tap Private Fiber

New backup pressures, falling equipment costs, and wider availability of both lit and dark fiber are leading more enterprises to create or expand private networks, according to the latest Byte and Switch Insider.

The report, Past Forward: Enterprise Fiber Nets Make a Comeback, reveals that some large enterprises, including Ford and publishing firm Gannett, have already gone beyond leasing and are now constructing their own fiber-optic networks. Other users may now follow suit, thanks to recent advances in the technology, which continue to drive costs down.

"Prices for enterprise-class optical equipment have fallen to the point that more organizations can consider building private networks using either lit or dark fiber available from a range of carriers and network operators," says Max Smetannikov, research analyst for Byte and Switch Insider, and author of the report. "Any organization that can invest $2,000 in telecom equipment now can seriously consider purchasing dark fiber for a strategic network," he says.

It's not just Ford and Gannett that are building their own dark fiber networks. Several carriers report that a number of U.S. banks with large call centers in North and South Dakota, for example, have been involved in building new fiber-optic networks. Others point to oil exploration operations in Canada that use fiber to send geological data.

Although there are currently no laws requiring enterprises to build private fiber networks, the report identifies mounting pressures from regulators and investors for enterprises to have access to data. South Korea, for example, has become the first country to require businesses to back up their data.The report also identifies a number of industries where users are particularly likely to create their own fiber networks. These include healthcare, where the Health Insurance Portability and Accountability Act (HIPAA) prescribes specific procedures for record storage and access, and the financial sector, which is wrestling with the backup requirements of the Sarbanes-Oxley Act (SOX). (See Retention Rules Set to Change, Research Finds HIPAA Ineffective, Users Splash Cash on SOX, SOX Spending Slams Security, and Help for the Compliance Crazed.) The bandwidth-hungry online media and education sectors are also prime candidates, according to the report.

Past Forward: Enterprise Fiber Nets Make a Comeback is available as part of an annual subscription (12 monthly issues) to Byte and Switch Insider, priced at $1,595. Individual reports are available for $900.

To subscribe, or for more information, please visit: Byte and Switch Insider. For more information about all of Light Reading Inc.'s Insider research services, please visit www.lightreading.com/research.

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Lee Salem

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