Business-to-Business (B2B) communication in a globalised world
In Switzerland, nearly half of the revenue of small and medium-sized enterprises (SME) comes from foreign markets. While open economies offer chances for companies to enter new markets and increase profits, they also pose novel challenges to efficient and secure communication. A company can use a private network to share information within its own enterprise. Yet, in order to share information with business partners outside, a company usually needs to connect to a public network.
In the automotive industry, for instance, only 40-60 per cent of the parts are produced by the automobile manufacturers themselves. For the remaining parts, automobile companies rely on parts manufacturers and subcontractors from across the globe. The German car producer BMW has more than 3000 suppliers from all over world; The sheer size of this network makes secure and efficient communication across different sites extremely complex.
The use of private networks in B2B
It is hard to imagine business operations without internet use in today’s world. Yet, the internet’s infrastructure as a public network relying on IP routing has several downsides in terms of security breaches and efficient data transmission.
In consequence, many companies rely on private networks rather than public ones for B2B communication. In particular, the use of Virtual Private Networks (VPN) with Multi-protocol Label Switching (MPLS) has become a prominent business solution. MPLS is a network routing technique independent of IP routing. Using MPLS has several advantages from a business perspective:
- MPLS uses a private infrastructure and is independent from IP routing. It is therefore exempt from security breaches specific to the Border Gateway Protocol (BGP) and in turn typically considered as a secure way to transmit data.
- MPLS provides predictable performance which can be important for voice over IP (VoIP) or video conferencing.
- MPLS is only targeted at B2B customers. In consequence, Service Providers have built a resilient core infrastructure, offering robust Service Level Agreement (SLA) specifically tailored to needs of B2B communication.
So why should businesses still hold onto public networks?
While MPLS offers several advantages in terms of efficiency, speed, and robustness, there are several shortcomings from a business perspective. Even though MPLS isolates customers from each other using Virtual Routing and Forwarding (VRF), it does not offer any inherent data protection. Furthermore, as MPLS VPN is a private network, it is by definition not pervasive. When using MPLS VPN, a company can only connect to other locations that are in the reach of their Service Provider. Connecting to companies via other Service Providers can be a tedious and cost-intensive task:
- The exact cost of MPLS circuits are hard to determine, especially as there are huge disparities across different locations. The average cost of a 100 Mbps access circuit with 20 Mbps bandwidth speed in North America is $2000 compared to $200 for a broadband circuit with the same speed. This makes the use of MPLS far more expensive than sending traffic over the public internet.
- It may be difficult to find an MPLS provider with global coverage. In order to expand their networks, MPLS providers often build partnerships with other service providers which, again, increases costs. Especially for businesses with a global reach this may significantly increase the cost of connectivity.
Let’s reconsider the example of BMW: in order to communicate with all 3000 subcontractors through a private network, all of them need an MPLS access point from the same supplier as BMW. Those subcontractors, in turn, may also work for Peugeot or Nissan, who probably use a different MPLS supplier. In consequence, every subcontractor needs to install multiple private connections from different MPLS providers. Both from an operational and a financial perspective this approach is therefore not efficient.
Public vs private networks: the use of next-generation internet
Current shortcomings in both private and public network use confront many businesses with a dilemma: either use public networks and face several downsides in terms of network performance, reliability, and security or use robust private networks at a high cost and lower flexibility.
The use of the SCION (Scalability, Control and Isolation On next-generation Networks) next generation internet architecture is a viable solution to this dilemma. Next-generation networks, offered by more and more service providers, are:
- Public, and thus allow any connected location to share data with another, even if they are connected through different service providers.
- Secure, as for example immune to security breaches related to BGP hijacking, thanks to the crypto-graphical protection of the path.
- Reliable and robust, due to SCION’s multi-pathing properties that grant its users full control over the routing process and therefore offers real end-to-end control about where the data goes and how it gets there.
- Performant, as customers can chose the path on a per application basis, depending on their needs: lower latency, higher throughput, or stable jitter amongst other.
In a nutshell, SCION offers features that enable B2B communication tailored to an individual company’s needs at lower costs and without compromising security.
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