New Manitoba network balances high tech with high risk in vendor selection

MTS Communication Inc.’s decision to employ Cisco Systems Inc.’s technology for a new Manitoba-wide data network might speak well of the latter firm’s routers and software, but it also speaks volumes about how service providers go about choosing vendors.

MTS Communications, a subsidiary of Manitoba’s incumbent telco, MTS Inc., announced in August that its province-wide MPLS-VPN network would be built on Cisco gear. According to Kelvin Shepherd, vice-president, network services and CTO of MTS Communications, the company earlier this year won a contract to provide secure and speedy data connections for Manitoba’s provincial government.

Shepherd called Cisco’s equipment “a key differentiator” in the service provider’s bid to build the network. MTS Communications proposed an MPLS-VPN platform comprising Cisco routers (the 7609 optical service router, the 7206 and 3640 network edge routers) and management software.

Shepherd said the Cisco equipment offered the proper mix of security and speed to meet the provincial government’s needs – broadband access and VPNs for quick and protected connections.

Shepherd also said Cisco got his company’s business because the vendor stands behind its products.

“We felt overall that Cisco had the best package – the expertise, the technology and the stability, which is important as well these days.”

Shepherd said stability is important because carriers want certain assurances. After all, they’re spending a lot of money for these network elements and it would be nice to know the vendor will survive to support them down the road.

“You can never be certain that the vendor or the product is going to be there 10 years from now,” Shepherd said. “But you want to be certain that it is supportable and you have the ability to deliver the service you’re committing to the customer.”

Lui Fogolini, Cisco Systems Canada’s vice-president, Canadian service provider operations, said MTS Communications is not alone in seeking stable vendors.

“Right now there is a lot of skepticism in the marketplace concerning survivability, as well as leadership,” he said, adding that Cisco has proven to be a stalwart in an industry faced with generally poor prospects.

But if stability is as important as Fogolini and Shepherd say it is, why did MTS Communications choose Nortel Networks Ltd.’s OPTera optical device for the new network’s transport layer? Brampton, Ont.-based Nortel has been shedding operating units and employees since the telecom bubble burst early last year. Its stock price is in the dumps. Nortel is no poster child for stability.

Does Nortel somehow offer the permanence MTS Communications seeks? In a word, yes. Shepherd is convinced that the gear maker stands firmly behind OPTera.

“The OPTera line is very successful for them and one that I think is core to their business going forward. We feel pretty confident that it’s not a product that they’re going to decide they don’t want anymore… And we did look at some competitive alternatives. In the end, it (the OPTera) was still the best solution – best features and best price.”

Concerning Nortel’s sorry stock situation, Shepherd said MTS Communications looks beyond vendors’ positions on the TSX when considering equipment.

“Unless we felt that there was a clear sign that the vendor is not committed to the technology, something more definitive than noticing that their stock price isn’t as high as it was a year ago, we would go ahead.”

According to Roberta Fox, president of Markham, Ont.-based research firm Fox Group Consulting, service providers often take many factors into account when considering vendors, including financing options, equipment specs, service offerings and company analysis (how the vendor operates).

Still, she said MTS Communications’ decision to employ Nortel equipment seems strange, especially considering the service provider’s focus on vendor stability.