For many banks and trading firms, the communications infrastructure that supports their business has grown organically over time utilizing different vendors for different applications. This multi-vendor approach to fulfilling communications requirements means that firms must identify the best carrier for each communication type – voice, enterprise and external trade connectivity – and then design an integrated network around those carriers.
There are numerous telecommunications and network companies that provide one type of service very well. For example, the incumbent telecommunications vendor in a region is a common choice for provision of a local voice network. As long as your requirement is for one communication type, the choice can be simple and obvious.
However, banks and trading firms usually have requirements for multiple network services, and a vendor’s expertise in one area doesn’t usually translate to expertise in the other areas. This is particularly true when a vendor’s business model is to sell a generic network product across multiple industry verticals, each with its own variety of requirements and service tolerances. The result is often a product that is a "best-compromise" of all requirements across their entire customer base.
One argument for using multiple vendors is that tit can be a way to diversify risk. However, to acheive the necessary diversification you must ensure that multiple vendors are available for each communication type – voice, enterprise and trade connectivity. In addition, you need to ensure that diversity goes beyond just selecting two different carriers. You need to ensure diversity between the carriers' technology:
• Are your diverse vendors located in different data centers?
• Are they on diverse fiber throughout the entire communications path?
• Are they using different routes from their data centers to your location?
• Once they reach your location, are they getting to your floor through separate risers in the building?
If you can't answer yes to all of these questions, you may be exposing your firm to a degree of risk that it can't afford. Properly implemented, the benefits of a multi-vendor communications approach can be realized, but this benefit must be offset by the increased complexity, financial and resource burden of managing multiple vendors, each with their own contracts, terms and conditions, technology, and operational process.
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