A TCO Comparison of Private WANs vs Managed Network Services for Enterprises

Private enterprise networks typically use MPLS, SD-WAN or Carrier Ethernet services. Managed network services are ubiquitous and easy to deploy; however, in some cases it makes sense for an enterprise to consider building a private network with dark fiber. Specifically, enterprises with one or more of the following requirements should consider a Private WAN employing dark fiber:

• Link speeds greater than 70 Gbps

• Ultra-low latency requirements

• Requirements for high-availability network topologies

Private WANs leveraging dark fiber allow enterprises to build highly-scalable, low-latency, and high-availability networks. Although the cost of managed network services is typically based on the port speed and guaranteed bandwidth of the connections, the cost of dark fiber is based on the location of the fiber and the distance between end points. This means that the cost of managed network services continues to rise as bandwidth increases while the cost of a private WAN with dark fiber is relatively flat as bandwidth increases. Therefore, these private networks can scale to exceedingly high bandwidth without dramatic increases in expenses. Additionally, dark fiber can provide extremely low latency because there is no carrier equipment between enterprise end points, and enterprises can choose fiber routes to minimize latency. Enterprises can also design fiber networks in ring or mesh topologies to create high-availability networks. The financial analysis in this paper uses North American pricing data; however, the results can be applied globally. If network demand and requirements justify the use of dark fiber then an enterprise needs to access the availability and pricing of fiber in its own regions and cities.

The types of enterprises that might be candidates for private WANs with dark fiber are:

• Financial services and program trading firms

• Hyperscalers and large web services companies

• Government organizations

This paper provides an overview of Private WANs and presents the results of a total cost of ownership model comparing a Private WAN with dark fiber to a managed network service (Carrier Ethernet). We use Carrier Ethernet as a comparison because it is the most cost- effective network service for sites that need very high bandwidth (10Gbps or greater).