Covad Launches New IP VPN Service Off 2009 MPLS Infrastructure Build-out

Event Summary

February 16, 2010 -- Covad has launched MPLS VPN services across its nationwide network, offering quality of service (QoS)/class of service (CoS) support. Covad MPLS VPN service is suitable for SMB and distributed enterprises; the service works across the carrier's range of endpoints, from DSL to DS3. Covad partners can use MPLS VPN to build their own value-added applications; wholesale partners can use MPLS traffic management for better traffic performance.

Quick Take

Analytical Summary

• Current Perspective: Positive on Covad's introduction of MPLS VPN service, because the carrier's retail and wholesale partners can use IP/MPLS traffic prioritization and tap the additional security of network-hosted VPN services that are logically separate from the public Internet. Partners can now use Covad's services to support larger, more sophisticated enterprise networks and applications using well-established IP/MPLS protocols for traffic separation and control.

• Vendor Importance: High to Covad, because the company added IP/MPLS infrastructure alongside its ATM core back in February 2009. A broad swath of carriers have deployed IP/MPLS VPNs – some as long as a decade ago – and Covad needed to introduce the service to keep up with industry standard practices. The carrier's other IP VPN option – an IPSec-based managed service serving up to 20 sites – will complement Covad MPLS VPN.

• Market Impact: Moderate on the business network services market because, even though it came late to IP/MPLS relative to its peers, Covad's service rollout will still find plenty of traction. Covad MPLS VPNs open up a range of opportunities for retail partners to develop and deliver their own applications over Covad's networks. Covad's wholesale partners accustomed to setting up MPLS NNIs will be able to operate end-to-end IP VPNs by tying their networks with Covad's.

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