Virtualization is taking the IT world by storm. The concept revolves around the creation of virtual devices in place of tangible technology products, such as computers, routers or software programs. The goal is to create the same utility with a smaller number of physical assets, while simultaneously increasing performance and driving down costs. Virtualization is alive and well in the VSAT industry with a variety of different offerings from different vendors.

For many years, market customers had only two ways to acquire VSAT services: purchasing a private hub or buying VSAT services à la carte from service providers. While private hubs provided customers with total control of their satellite network, the capability came at a very high cost – often exceeding $1 million for hardware alone. A specialized staff was required for proper care and feeding, which added to the total cost of ownership. The message was clear: organizations with extremely deep pockets need only apply for membership into the private hub fraternity.

Shared hub services, on the other hand, were far less expensive and could be purchased discretely. If you needed 57 VSATs, that’s all you would have to pay for. There was need to worry about buying a big chunk of bandwidth from a satellite operator if you only need a sliver. While shared hub VSAT services certainly lowered the cost of entry, they offered limited, if any, control of the hub to the end-user or reseller. Virtual hub services are a good compromise that exist somewhere between a private and shared hub, providing end-users and resellers more control but at a much lower cost than purchasing and operating a private hub.

Major Subsystems

VSAT hubs consist of several major subsystems: baseband equipment, which deals with data protocols and traffic management; and a radio frequency transmitter (RFT), which transmits and receives signals from the satellite. Hubs also have a network management system, however, we will assume for this article that they will be part of the baseband equipment. The RFT package includes a large antenna, amplifiers and other RF components.

The baseband and RFT subsystems require completely different skill sets to manage. Private hub operators not only need IP and routing experts to control baseband equipment, they also require RF specialists to maintain amplifiers and deal with satellite operators. This “second staff” is highly specialized and generally dedicated to RF matters at a large expense, but one that is affordable if amortized across thousands of VSATs.

Virtual hub offerings are not the same from vendor to vendor, as their features and functions alter significantly. The common denominator is that the RFT, and its management, is outsourced separately from the baseband equipment.

You will achieve better economy if you own your own infrastructure, assuming you have a large enough network to justify it.
—Dave Rehbehn, Hughes

Hughes offers clients and resellers a range of virtual hub services. “Depending on the amount of control our customers desire to have, we can offer several different solutions. Some clients, like Row 44 that supplies Internet support to Southwest Airlines’ aircraft, want complete control. GTECH, which operates the lottery systems in many states, is another good example. These companies own their baseband infrastructure and Hughes operates it at the customer’s direction,” says Dave Rehbehn, senior marketing director, Hughes.

Hughes offers a solution that it calls a private IP network. “Our customers have dedicated elements of the baseband equipment — this includes a dedicated IP gateway, which is where services plans are defined in the hub. There are many advantages to this approach. The enterprise customer or reseller can define their own service level agreements (SLA) and Quality of Service (QoS). Hughes then operates the service for the customer,” says Rehbehn. “You will achieve better economy if you own your own infrastructure, assuming you have a large enough network to justify it. Scale and cost are the two largest negatives of private network. Virtual hubs have tremendous advantages; they scale very well because personnel costs are bundled in the service offering. Of course, one of the biggest values is that you don’t have to invest in an RFT and then manage it. In essence, you are sharing someone else’s teleport.”

Spacenet provides virtual hub solutions, which it calls an enterprise partition, primarily to end-users who are technically capable of providing satellite services themselves. Alasdair Calder, director of product management, Spacenet, says, “We provide enterprise partitions to a number of sophisticated customers, which provide satellite services to the energy industry. They own their own hub equipment and space segment but look to Spacenet to operate it for them. Each of our clients has a unique set of requirements and we work with them to determine the level of support they need. For instance, one client may want to provide Tier 1 support directly for their client and then look to Spacenet for Tier 2 and 3 support and another client may only want Tier 3 support.”

Virtual Network Operator

Although the term “mobile virtual network operator (MVNO)” was coined by the cellular industry, Virtual Network Operator (VNO) has been adopted by the satellite industry and is synonymous with iDirect’s virtual hub offering. iDirect’s VNO solution allows companies to purchase baseband equipment either as a fully populated baseband chassis or as discrete components, and then locate the baseband equipment at a remote teleport. The teleport operator that houses and operates the VNO hardware is known as the host network operator (HNO).

In the past, a service provider had to purchase a dedicated hub for each satellite that service was offered on. A single iDirect hub can communicate simultaneously with up to five separate satellites. This flexible, modular approach and remote connectivity option has driven down the traditional barriers to entry. The company estimates that it has installed 150–200 VNOs globally.

“The solution is ideal in a number of situations,” says Dean Griffler, senior vice president, Global Sales, iDirect. “A VNO is a great way for a service provider that is reselling managed services to take that next step and take more control of their network without having to invest in a full hub and network build-out, or the people to operate it. … Satellite service providers can also use the VNO model to set-up operations in specific regions. A network operator may not want to set-up an entire operation in a specific area but they can still provide services there. The operator may want to test the market before making a full commitment or there may not be enough customers in a specific country to support a dedicated hub.”

Griffler also notes the many advantages of this business plan, such as the customer not having to be as sophisticated on its RF side, which reduces both its capital investment in hub hardware and personnel cost of RF engineers. “The VNO business provides a stepping stone approach to go from being a reseller of managed services to owning and operating your own hub,” he says. “You now have the ability to limit your financial exposure and pay as you go. The only costs associated with a VNO are the collocation of the baseband equipment at a teleport and the VNO licenses.”

Simplicity and Scalability

Intelsat is currently the largest provider of iDirect HNO services. The company operates a fleet of 53 satellites and eight teleports interconnected by a global terrestrial data network and has provided collocation services at its teleports for many years. Intelsat is now able to provide connectivity through 46 of its satellites.

“The advantages of the iDirect hub are its simplicity and scalability,” says Steve Good, Intelsat’s vice president of Network Services Product Management. “You can put five separate line cards in a chassis, and each card allows you to communicate to a separate satellite. It requires a very small investment to bring-up services on a new satellite. This type of hub architecture allows Intelsat and its customer base to grow their networks intelligently as requirements change over time. It enables us to add custom-sized services on new satellites where and when there is demand rather than being forced to take ‘a build it and they will come’ approach.”

In addition to lowering the cost for service providers to expand into new regions, Good highlights that Intelsat’s offering provides valuable secondary benefits. “As the HNO, we take end-to-end responsibility, and our SLAs are built around delivering bits with a given level of availability and reliability,” he says. “This is different than selling a customer a number of megahertz of bandwidth on a particular satellite and leaving the rest to them. Basically, we are on the hook for all elements of the delivery of the bits.”

Intelsat thoroughly tests all software releases before deploying them on its hubs to ensure proper operability and leverages its global terrestrial network, IntelsatONE, to get the bits where they need to go, according to Good. “Basically, when a customer connects to one of our teleports, they are accessing our entire global network of fiber and satellites.”

There is an additional advantage that the VNO model delivers for service providers whose strongest competency does not include RF communications. Good comments that proper RF design is critical to guarantee a satellite network’s robustness. “Accurate link budgets are required to ensure that modulation and forward error-correction schemes, along with power levels, are optimized. Intelsat has a team of 30 engineers around the world that work closely with its customers before a network is provisioned. This ensures that the RF design is done properly. After a network is rolled out, more than 100 engineers at our control center and teleports are available to ensure that the entire RF chain remains solid. All of this bundled into the price per megabit. In essence, the VNO service provider is outsourcing their RF department to Intelsat.”

The VNO managed service also provides the advantage of increased interference mitigation techniques. Good acknowledges that interference is a wide spread problem in the satellite industry and that Intelsat has invested a lot of money and effort into tools and training to combat this problem. “When it happens, Intelsat can bring a lot of resources to bear on the problem,” says Good.

Parallels

Garrett Hill, president of X2nSat, a VSAT solutions provider, compares VSAT hub strategies with the difference between owning and renting a car. “There are a lot of parallels between owning a car and owning a VSAT hub. If you own your own car, you have the freedom to drive it whenever and wherever you wish but there are costs associated with ownership, such as payments and insurance,” he says. “A virtual hub is like a rental car. There are certain costs and limitations. You can’t smoke in the car, you can’t take it off-road and you get charged by the mile. A shared hub solution is like car-pooling, which offers the least amount of control. You have to negotiate what time you want to go to work and go home in the afternoon. One of the riders may have an SUV while another person in the car-pool has an economy car, which may require each person to compromise. This is similar to two different types of businesses on the same, shared hub. If an upgrade is required, all of the users may not want to participate in the upgrade costs.”

Shared hubs can offer service providers greater flexibility when offering services to customers. “Each of our solutions offers significant advantages over traditional managed services sold through shared hubs. Our clients can provision services themselves and they don’t have to call the service provider to make changes. Second, our virtual hub clients have direct access to the network management system (NMS) and they can make actual changes to the system. Resellers of managed services don’t have this type of access and are lucky if they get monitoring privileges,” comments Hill. “Last, our clients have control regarding the IP addressing in their network. Again, resellers and customers who buy managed services have to deal with the IP addresses they are assigned by the service provider.”

The control of networks is key. “Our clients want to be in control of the software version running on their hubs. They want to determine when the maintenance windows will occur. They also want to know what satellite they will be using, not only now, but in the future should a change be required,” says Hill.

X2nSat provides virtual hub solutions utilizing both ViaSat and iDirect hub hardware. “Both products have their strengths,” Hill continues. “Generally, iDirect is the most expensive solution and has the highest total cost of ownership. A number of things factor into this, including software, maintenance and transition costs between technologies. You need to look at a virtual hub with a 10-year vision. Along the way, you will have to put money into the system for upgrades and new technology. With iDirect, the investment over seven years will be twice the original purchase price. Software and support is a big chunk of the cost and you need to understand how the program works.”