Enabling different classes of service within business data is nothing new. When major service providers launched MPLS IP networks in 1998 to 2000, most of them touted different classes of service to enable their customers to converge latency-sensitive voice and video services onto a single pipe with best-effort data.

But as data applications grow more sophisticated and more mission critical, customers are asking for-and getting-more granular class-of-service (COS) capabilities. Service providers, in turn, are finding they can charge more for their higher classes of service, which come with more stringent and more diverse service level agreements (SLAs).

“Class of service is almost the first question our customers ask,” said Alla Reznik, group manager of Ethernet product marketing for Verizon Business, which announced an Ethernet virtual private local area network service (EVPLS) in March. “We haven't sold much EVPLS yet, but as we are getting through the very large wake of response to our launch announcement, this is a very important question.”

In March, Verizon announced a new COS offering with six classes of service, four of which contain subclasses of service, for a total of 10 priority levels. XO Communications launched its IP/virtual private network (VPN) service in March as well, with four COS categories, but a very aggressive flat-rate price that doesn't include a premium for higher COS and doesn't limit how much of a customer's bandwidth is the top class.

Those announcements highlight the growing diversity among COS offerings and the different philosophy service providers are bringing to market in their business services.

“There are a lot of changes in the market, especially from the standpoint of how to differentiate,” said Ray Vinson, technical marketing manager for Bridgewater Systems, which offers subscriber-centric policy management. “The industry has been stuck in bronze, silver and gold mode for a long time. But they now have the ability to identify different types of applications down to the flow level. That gives them the opportunity to get much more granular.”

Continual improvements in routing technology have also enabled providers to improve their services, said Manish Malhotra, executive director of VPN product management for AT&T.

“I think there are definitely constant improvements in our [class-of-service] offerings,” he said. “As vendors that are providing our equipment in the network, whether it is the Cisco routers or Juniper platforms or the Avici platforms that we have in our core. There is an ongoing program in our backbone to take advantage of that. One enhancement that is being made is to be able to offer [class of service] for multicast. Even though we have been offering classes of service for some time, multicast is a new feature we have added, so that customers who are doing multicast for video or for software distribution can also do class of service with that.”

The other trend driving customers to COS and prompting service providers to polish their offerings is basic convergence in the business marketing, from small and medium-sized businesses all the way up to the Fortune 500.

“The applications being run over MPLS are much more diverse,” Malhotra said. “When we launched MPLS in 1998, there wasn't much [voice over IP]. We are definitely seeing a rise in customers doing VoIP. And there is increasing growth in customers looking to do video.”

COS capabilities enable voice and video to travel data networks by assigning different priorities to different types of traffic, with services sensitive to latency and jitter typically getting the highest class of service-often known as real-time-where packets are never buffered. As more companies automate internal processes from sales force and resource management to human relations functions, there are increasingly data applications that also need a COS to guarantee performance. And there remains a large amount of “best-effort” services such as Web surfing or e-mail.

However, there are many options within COS that providers can use to customize their service. One example is allowing customers' best-effort traffic to burst up to the full bandwidth.

AT&T does allow bursting for traffic in the lower three classes of its COS, but not for the top class of traffic, Malhotra said.

“Whatever bandwidth you reserve for Class 1 will be available all the time,” he said. “If we allow any of our customers to burst within this class, we are taking bandwidth away from someone else. We don't oversubscribe that bandwidth.”

Verizon's Private IP/MPLS service also restricts bursting to protect its highest COS but its Ethernet offerings enable bursting to the fullest extent of the bandwidth purchased, Reznik said.

Similarly, Ethernet service provider Yipes, which will announce COS availability in May, intends to offer maximum flexibility for its customers, said Keao Caindee, chief marketing officer.

“We will have four classes of service, and when you combine the benefits of Ethernet-which are that it's simple, it's high-performance and it's reliable-with a VPLS backbone and any-to-any connectivity with hundreds of sites, and you layer on COS, we think you have an MPLS killer,” he said.

What is driving Yipes to implement COS is not convergence or voice services, he said, as its customers already do that today over its network. But by adding class of service, the company will enable its customers to buy the appropriate amount of bandwidth for multiple sites, from headquarters to remote offices, and network them together, knowing that COS will protect voice or other priority traffic to the sites with lesser bandwidth.

“Rather than replace a T-1 frame relay services with a three Meg Ethernet service around the world, maybe it makes sense to go to ten Meg to twenty Meg at the major sites and for the few offices in Prague or Dubai, use COS over smaller pipes because you can't afford to put in the larger bandwidth to those offices,” Caindee said.

What Yipes also offers today is the ability for customers to access a customer portal and choose-on a dynamic or scheduled basis-to increase their bandwidth, up to the maximum for their router port, for a set period of time. This Yipes Now offer is based on patented technology developed by Kamran Sistanizadeh, Yipes chief technology officer and co-founder, which enables the company to make the change within 5 minutes of the request.

Orange Business Services has taken its COS offering one step further and is offering COS and SLAs that are specific to applications, said Cedric Lockhart, vice president of the Network Competency Center for the company in the Americas.

“That's a service that today we offer in France only, but it will be rolled out globally this year,” he said. “Each application that the customer wants to define with its own class of service can be done. There are getting very specific-in terms of acceleration, bandwidth, priority and how the traffic is treated in the queue. The customer takes a set of applications-SAP [business software], voice, e-mail, other internal apps-and works with our team to define specific requirements for those applications. While we have five classes of service at the aggregate level, each individual application is looked at in real time at the network and is treated accordingly.”

Verizon Business has looked at application-specific class of service, but believes its customers want more flexibility, said Danellie Young, director for IP, Ethernet and core services.

“While there is quite a bit of granularity to our COS that you can leverage, you don't have to,” she said. “It is there, and we are happy to guide our customers through that process. We don't want to be so stringent on setting rules that are per-application.”

For example, she said, the real-time COS is usually intended for voice communications, but some customers use the next highest class and find it works well.

SLAs go hand in hand with COS, and service providers are also attempting to compete in their SLAs. AT&T recently added a jitter SLA for its Class 1 service, something Verizon offers as well.

XO is providing jitter SLAs for all four of its service classes, said Dan Toomey, senior product manager for XO, as it tries to capture customers. “We want to be the total managed service provider,” he said. “Our goal is to get their network. We will charge a premium for the service but maybe not as much as others.”

Outside the U.S., service providers are making a bigger push to not only offer SLAs but also to enable customers to easily ensure the SLA is being met, said Fred Ellefson, vice president of business development for ADVA Optical Networking, an optical equipment-maker.

“The U.S. is a little behind in this area,” he said. “We get pressed into some of this stuff in Asia and in Europe. It's one thing to specify a class of service and bursting and all those kinds of things, but it's another thing to report it to your customers. In the frame relay world, customers had a portal that they could get into that would show them how the network was performing. Now, service providers have put the burden back on the end user.”

In Asia already and soon in Europe, service providers are measuring jitter, delay and other characteristics, both in the network backbone and down to the customer premises, and giving customers a Web portal or a monthly report to show how their services are performing, he said.

Verizon hopes to bring that capability out by late 2007 for its Private IP/MPLS service and by early 2008 for its Ethernet offerings, according to Young and Reznik. The carrier is already offering services that let enterprises manage the use of their networks by employees using policy controls that can limit access to types of content or applications on a per-employee basis and also enable service providers to see how their networks are being used.

“They can see if one application is chewing up a lot of traffic and then take the appropriate action,” Young said.

Bridgewater's Vinson sees service providers increasingly offering policy on their SLAs and believes this eventually leads back to a per-application SLA.

“Carriers are starting to feel the pain where they have applications that are going to eat up a lot of bandwidth,” he said. “The old way of handling it-add more bandwidth-is a business model with a limited life span.”

Whether they go down to the application or stop somewhere short, COS offerings will continue to improve and become more granular and better supported throughout the network, as service providers look to both compete for business and create new revenue-generating data services.

VERIZON'S CLASSES OF SERVICE

Class of service	Priority	Traffic
EF	Highest	Voice, video
AF4X*	Second highest	Video
AF3X*	Third highest	Mission-critical apps such SAP, Siebel, PeopleSoft
AF2X*	Fourth highest	Transactional data
AF1X*	Fifth highest	General data
Default	Lowest priority	Best-effort service for all remaining apps, including e-mail, file transfer, Web browsing
*Each of these classes includes two subclasses for a total of 10 priority levels.
Source: Verizon Business