How many ISPs should I use in my enterprise WAN?

Creating true network diversity in the event of a blackout or interruption, without needing to deal with so many ISPs, is proving a critical challenge for many enterprises. Part of the reason many businesses have migrated from MPLS to SD-WAN and SASE solutions is that these technologies make it much easier to leverage multiple ISPs, providing meaningful network flexibility and lower costs. 

Although more ISPs can mean more network flexibility, lower costs, more type 1 access, and better overall network performance as a result, it also means more MSAs to negotiate, more vendors to quote from, and more overhead. So that begs the question: how many ISPs should I use in my enterprise WAN?

The Basics: Making a Smart Choice

How we see enterprises deal with this in the real world can be wildly different from one enterprise to the next. Some go all-in and are willing to make decisions on a site level, with an eagerness to contract with an almost unlimited number of ISPs. Others have established MSA relationships with only a few providers (or maybe even one) and want to create a strategy within those relationships. You’ll want to understand the pros and cons of each approach so you can make an informed, data-driven decision that’s right for your business. 

The good news is there’s no one-size-fits-all solution! On the spectrum from “one ISP” to “every ISP I can find,” the so-called “sweet spot” is a matter of balance. What trade-offs matter to you?

Pros and Cons Shown Through Examples

Let’s consider a hypothetical example where Company A has 100 sites and requires diverse internet connectivity at each site, or at least two different ISP connections. This means there are 200 different circuits / connections that Company A needs to purchase, and they decide they want to source this from a single provider. In turn, the provider will, on their behalf, source the network connections from various underlying providers. Here are the pros and cons of a single carrier approach.

Pros of a Single Carrier Approach

• A single sales contact/account team

• One contract or MSA 

• One invoice

• One implementation contact

• A single throat to choke (or back to pat) for repair issues.

• An easy-to-administer RFP process – one vendor gets the scope of work and only one bid response to analyze 

• Contract renewal is easy to manage because all services are on a single contract 

Cons of a Single Carrier Approach

Of course, nothing is perfect! There are a few costly downsides to this approach, too.

• Pricing is over 20-30% higher than buying directly from the underlying carriers providing service, as the single provide you use is likely reselling Type 2 connectivity at a number of sites

• You take on many Type 2 (or resold) connections, which complicates implementation and increases the likelihood of service delivery delays. The single provider must deal with other carriers to install access/fiber/connectivity. “Hurry up and wait” may become the motto of your rollout.

• Loss of fidelity on network providers, and ultimately diversity. Yes! You can lack diversity even if you appear to have diverse connections on paper. It is common for aggregators:

  • To inaccurately report on last-mile providers. 

  • To source diverse layer 2 connectivity from two providers but have it backhauled to their own single ASN, which introduces many common failure points. 

• Collecting KMZ/KML data from different providers being sourced through an aggregator is extremely tedious and time-consuming, meaning the information often isn’t thoroughly checked. 

• Extended mean time to repair intervals on repair-related issues, as a ticket needs to be called into the aggregator, who then open a second ticket with the actual company providing the service. 

• The RFP process can take a long time to complete as the aggregator sources many wholesale quotes from third parties to deliver the service. 

• The benefits you get on renewal come with costs - changing vendors becomes exponentially harder, as you need to change your entire network all at once and your sole provider has complete leverage over you.

Now, let’s consider an example where Company A has 100 sites and requires diverse internet connectivity at each site (i.e. two different ISP connections). Instead of sourcing from a single provider, they decide not to limit themselves, working with many carriers so they can choose the best at each site.

Pros of a Multi-Carrier Approach

Again, there are some noted benefits to this approach.

• The lowest possible price, as you are sourcing directly from the actual service provider and not buying the service (or elements of the service) from a third-party aggregator.

• Fast turnaround time on pricing, as you are requesting quotes directly from the actual service provider and not through a third party. 

• Highest fidelity into the network services you are buying, and last mile and ASN information can be verified with first-hand information. This means better network performance and true diversity.

• Significantly improved implementation timelines and visibility. 

• Shortest mean-time to repair – when something breaks you are calling the company that owns the problem directly.

• No single carrier has leverage over your entire network.

Cons of a Multi-Carrier Approach

The multi-carrier model, however, has its own cons to consider.

• You need to determine who the relevant providers are at all 100 sites. Even with hours of Googling and phone calls, you are extremely unlikely to uncover all your options.

• You must deal with many account/sales teams and the RFP is cumbersome, with many participants quoting services at different sites. While responses come back faster, it can be difficult to track and compile the data. Carriers deliver pricing information in different formats, which makes managing the responses challenging.  

• You take on full responsibility for validating diversity. This is manageable if all you need is carrier diversity, but if you need to validate full-route diversity with KMZ/KML data, it is a huge undertaking. 

• You are forced to take on many MSAs, and legal negotiations can take a lot of time.

• You need to deal with many different implementation contacts, across many carriers, and coordinate all of them. Get ready to juggle!

• You must index and manage who your carriers are at each site through some sort of asset tracking system. We see Microsoft Excel or ServiceNow used frequently. Storing contract dates, service start dates, IP info, and other information takes a lot of effort as you need to manually add this information for each ISP.  

• Paying multiple telecom bills is a big pain.

• When something breaks, you need to figure out who to call.

• Re-shopping services (as contracts expire) takes a lot of effort.

We covered a similar set of pros and cons in more depth in our piece about bulk purchasing of internet / WAN circuits. From the pros and cons above, you can see why most companies decide to work with a small number of carriers. While the advantages of working with many carriers are real and tangible, in that they deliver better pricing and often a better network, it becomes almost impossible to manage with standard resourcing and tooling. After all, you have a business to run, and it isn’t an ISP-sourcing business, right?

Lightyear is Revolutionizing the Management of a Multi-ISP Network

What if there was a better way? A way to have your cake – and eat it too? Enter Lightyear, the Telecom Operating System. We have built four key components within our core software product to solve all the challenges listed above. You read that right – all of them!

Let’s go back and reconsider the scenario where Company A has 100 sites and requires diverse internet connectivity at each site. Instead of choosing one or 100 providers arbitrarily, as the company itself may, Lightyear instead takes a data-driven approach. This is how it breaks down.

1. Bulk Site Procurement

The Lightyear Bulk Site tool allows our team to create a real strategy for how many carriers enterprise A should work with. We will ingest the location data for all 100 sites and run it against our network intelligence database. This allows us to identify every potential provider at all 100 sites. In most cases, the total number of carriers available will be in the hundreds. However, our Bulk Site tool allows us to identify providers who are available at multiple sites and provides a breakdown of aggregate availability across the 100-location footprint. In other words, we identify the providers that have the highest density across Company A’s footprint. 

Once we have this data, we can determine how many carriers it would take to gain 100% coverage across all sites. In most cases, we see four to seven carriers being able to cover upwards of 90% of sites, and then a long tail afterwards. 

The next step in our bulk site process is leveraging our pricing dataset, which now has over 1,000,000+ price data points from thousands of different carriers globally. This pricing data allows us to determine the cost benefit of moving from four to eight providers or the added cost of moving from 10 to two providers. 

The goal is to find the point of diminishing returns for Company A, or when it makes sense to stop adding carriers. Lastly, once we have come up with a core carrier set, there is often a subset of addresses that are still not covered. This is where we plug in a specialized aggregator, which can be used to source type 2, or resale, connectivity from hundreds of partner providers. This single provider is then responsible for the long tail or the harder-to-service sites. 

The result? A carrier mix that covers the vast majority of Company A’s footprint with direct type 1 access (and all its merits). We then make an educated, data-driven decision on where the compromise of aggregation makes sense for Company A. In most cases, this is a network of 90% type 1 connectivity, and 10% of resold, or type 2, connectivity. This yields a lower-cost, higher-performing network, while still maintaining a reasonable number of carriers. 

2. Lightyear’s Procurement Software

Now that the right strategy and carriers for Company A’s locations have been determined, we use Lightyear’s Procurement software to automate the carrier and RFP workflows. As an end user, Company A simply provides addresses and desired service parameters via our 60-second questionnaire. Then, our software uses both their service needs and its intrinsic network intelligence to route the request to relevant carriers within Enterprise A’s approved providers list. Enterprise A can sign each carrier's contract online through the Lightyear platform. These are the same MSAs that Company A may have had in place for years. 

 After the orders have been signed, their orders move into the service delivery module within Lightyear’s procurement platform. From here, Enterprise A can see all their order statuses with each carrier, survey dates, FOC dates, and so on. A Lightyear service delivery guru will watch over the orders and report any at-risk orders. If an order needs to be escalated with a carrier, that Lightyear PM team member will handle this as well. 

3. Network Inventory Manager (NIM) 

Lightyear’s service doesn’t stop with the initial order. Post-installation, the service and all its details flow into Lightyear’s Network Inventory Manager. Company A can see their service start and end dates, costs, and technical information like circuit IDs and IP addresses. Network Inventory Manager will also re-shop services automatically as each carrier contract nears expiry. The platform will identify new providers that may have not been initially available and ensures long-term optimization of cost. Additionally, if a non-repair ticket needs to be opened with a carrier, it can be done through NIM too. 

4. Bill Consolidation

If Company A wants a single invoice for all of their services, they can opt into Lightyear’s Bill Consolidation Product. Lightyear’s Bill Consolidation ensures all the carrier invoices were issued accurately for the month and bills are paid on time. Should there be a billing error with any carrier, Lightyear will identify it and create the billing ticket with the provider while also following it through to its resolution. 

In short, the Lightyear platform allows enterprises to work with more carriers, with better efficiency, and tighter pricing. All while maintaining a cohesive, centralized, and carrier-agnostic management plane. This allows enterprises to build better networks, at a lower cost, with greater predictability, and in less time. The Lightyear platform allows you to achieve what you’d achieve with a carrier aggregation strategy, with software that’s more cost-effective and efficient than traditional brick-and-mortar aggregation.

Ready to learn more about how Lightyear can help you shape the best possible ISP balance in your business? Reach out to our helpful team today – they are ready to help!