CIOs are giving satellite communications a second look, as providers deliver faster, more affordable services and as more government agencies and large corporations focus on keeping networks up and running.
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One sign of this trend: The U.S. government has announced a joint military/civilian agency purchase for commercial satellite communications services worth an estimated $5 billion over 10 years. The feds plan to request bids from satellite communications providers next year and to award contracts in 2011.
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"We see the need for commercial satcom service to continue and to increase over the next couple of years," says Kevin Gallo, program manager for satcom services at the U.S. General Services Administration.
The U.S. government is interested in commercial satellite services for traditional uses - emergency response, remote locations, video broadcast and distance learning - as well as the emerging area of continuity of operations (COOP).
"We think every organization should consider using satcom for their COOP needs," Gallo says, pointing out that satellite offers excellent redundancy for terrestrial networks and can be used for voice and data. "Satellite-provided backup can really be cost-effective insurance for when your terrestrial network goes down. It's available at a low cost, and you can surge when you need it."
Among the companies that are buying satellite services to back up terrestrial networks are Republic National Distributing Co. (RNDC), a wine and liquor distributor, and Roundtree Automotive, an Alabama car dealership.
Companies with remote locations such as BP, ConocoPhillips and other gas station chains have traditionally used satellite communications for low-bandwidth applications such as credit card authorizations and inventory updates. But as the satellite capacity over the United States increases, more enterprises are considering satellite for broadband and mobile applications.
"There's always been demand for higher bandwidth satellite solutions from enterprises… The problem has been the supply," says Christopher Baugh, president of NSR, a market research firm specializing in satellite and wireless services.
Baugh says that the newest satellites from Hughes, ViaSat and WildBlue will change how CIOs view satellite services for broadband applications, particularly COOP.
COOP is "a no-brainer for a lot of enterprises that need 100% or near 100% uptime," Baugh says. "This has been talked about since 2005, after Hurricane Katrina. That's when disaster recovery and business continuity propelled itself to the forefront."
The new economics of Satcom
Enterprises are interested in satellite communications because it has gotten faster, less expensive and more reliable over the last five years.
"The cost of satellite service has come way down, and it will continue to come down," says Lisa Scalpone, senior vice president for business development at WildBlue, a residential satellite broadband service that is available to enterprise customers through resellers. "The newest satellites offer 10 times the capacity of older models but at the same cost."
For example, WildBlue provides a Ka-band satellite service with 1.5 megabit/sec download and 256 kilobit/sec upload for less than $80 a month. WildBlue has been selling its broadband satellite service to residential customers for four years, and it has attracted 400,000 customers.
Although WildBlue doesn't offer COOP services to enterprises directly, the company says it has excellent growth potential.
"Satellite is such a tremendous resource for continuity of operations because you cannot take out the core infrastructure. The satellite is 22,000 miles in space. Even if you have a terrorist attack or a massive fire, you have a satellite in the sky that can't be taken out," Scalpone says. "Even if the end user site is destroyed, you can simply bring in a managed gateway. All you need is a power supply. You can run it on battery."
Internet Technology Solutions (ITS), a WildBlue reseller in Centennial, Colo., is pitching T-1 backup services to telecom, energy and utilities companies for less than $2,000 a year.
"These companies have two things in common: they have to have connectivity 24-by-7, and they are in underserved areas," says Randy Thompson, president of ITS. "Right now, satellite is not competitive with cable modem. But it's very, very inexpensive compared to what it used to be. It's a very inexpensive security blanket for backup applications."
Next-generation satellites due for launch in the next two years will be an even better fit for COOP.
The ViaSat-1 satellite, due for launch in the first half of 2011, will have another 10 times the capacity of today's Ka-band satellites for the same cost. ViaSat calls this satellite a third-generation satellite, following in the footsteps of Ku- and C-band satellites and Ka-band satellites.
"These third-generation satellites don't cost that much more to design, build and launch than the second or the first but they have 10 times the capacity of the second and 100 times the capacity of the first," says Kristi Jaska, vice president of strategy and marketing for commercial satellite networks at ViaSat. "They become much more cost-competitive with other technologies."
Jaska says ViaSat's new satellite will provide up to 20 megabits/sec download speeds for enterprise customers.
"Right now companies are using DSL or EVDO to backup T-1s," Jaska says. "The third-generation satellites bring us squarely into the mix of being a better choice than DSL for backup."
The latest satellites eliminate the problem of latency, too, by adding application acceleration and WAN optimization features. ViaSat, for example, offers application acceleration that's built into its satellite ground equipment.
DISA promotes satellite backup
One organization that's embracing satellite communications for network redundancy is the Defense Information Systems Agency (DISA).
Bruce Bennett, DISA's director and procurement executive officer for satellite communications, teleports and services, says the newest communications satellites offer more capacity and more of them are being launched at a time, bringing down the cost for broadband service.
"This new generation of satellite communications is going to have a significant amount of bandwidth and is very economical," Bennett says. "It will be a third of the cost you see today, and you can buy it on the spot. You can get guaranteed, variable or best-effort kind of bandwidth so it becomes very economical to have everything backed up."
In the United States, DISA is looking at a satellite/wireless combination that would serve as a backup to its terrestrial networks
"We're also doing a lot of work in the area of using satellite as a front end for major wireless nodes so that we don't have to hook up to the terrestrial infrastructure," Bennett says. "We're going to use broadband from small VSAT terminals and then feed that into WiMAX or LTE for backup."
DISA encourages other enterprises to consider satcom to improve network diversity and reliability.
"People tend to only think about … adding more fiber and adding more routers. They don't think about adding different layers of transport. Instead of more terrestrial, they could have satellite or wireless," Bennett says.
Hughes Network Systems has been promoting business continuity applications for broadband satellite since 2005, after Hurricane Katrina wiped out New Orleans and surrounding areas.
"After 9/11, federal agencies started to recognize the need for redundant communications, and where all of them went was down the path of awarding contracts to two terrestrial carriers," says Tony Bardo, assistant vice president for government solutions at Hughes. "What Katrina taught us is that nothing could be further from the truth. Those terrestrial lines came to a screeching halt…The only thing that worked was satellite."
Bardo says it's been easier to pitch back-up satellite services since spring 2008, when Hughes started selling services from its newest satellite dubbed SPACEWAY 3. That's because the SPACEWAY 3 services are a better fit for backing up MPLS networks, which feature differentiated classes of service.
"Our story is better. It's one of speed, and it's a lot less expensive," Bardo says. "Now these services have the ability to match up well with terrestrial services in most parts of the country."
Hughes offers a part-time broadband service that companies can buy for less than $150 a month. This service is like an insurance plan that companies can call up if they suffer a natural disaster or a fiber cut that eliminates their Internet access.
"If you have terrestrial communications, you do have single points of failure, and it's often in that last mile," Bardo says. "Even if you're buying from two carriers, you're not as diverse as you think you are. Our service is really insurance… The key attribute of satellite is that it's going to get you a long ways away from the disaster."