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How to network international offices for fast application access

Posted on 2006-04-07
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Last Modified: 2010-03-19
We have office in Ireland, the US and China. We host our ERP system in the Irish office and want to give access to this system to our accounting staff in the China office. We have a 4MB ADSL into the office on Ireland and a 1MB leased line into the office in China. We have tried using the application using a Firewall/VPN in Ireland and VPN client in China but it is too slow.
We got a price from our IPS in China for a IP-VPN but the cost was way too high at about $4,000/month for 512k and $7000 for 1mb.
Can you tell be the best and most cost affective way to network the offices so that we can get much faster access between the offices?


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Question by:galtee25
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by:ECNSSMT
ID: 16400222
From any perspective, an investiment has to be made in your telecoms infrastructure.  Traditionally, leased private lines were the way to go to insure proper global communications (with SLAs stating 99.999% up time).  The cost factor came in second to the need for uninterrupted communications to provide the means for the company to do their daily processing.  Loss of that ability meant lost revenue or an impact cost.

If you are concerned with the out of pocket costs, you may want to talk to your resident CPA especially if they have a decent background in international tax laws, they may be able effectively to utilize these operating costs in their taxation strategy.  This idea sometimes slips thru the cracks of the IT & Accounting divide.

Regards,  
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by:t_swartz
ID: 16401454
You may want to just host the application via a terminal server or IBM Webshere instead. W/ Term server, all the interaction would be done between the term server and the erp app over the local LAN in your Ireland office. The remote users accessing the term server (or Citrix, depending on what you need to accomplish) session would need very low bandwidth to work pretty well.
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by:galtee25
ID: 16415695
Thanks for your comments.

When you say taxation strategy, is this cost different to normal operating costs?

We have tried Term server but unfortunately is not really usable for high volumn usage as it is too slow.
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by:ECNSSMT
ID: 16418725
Hi galtee25,

The way that tax laws are drawn up, they have specific relevence to the region, state, city you are operating in.  Like personal income taxes, your taxes vary depending on the legal state you are claiming in.  The same can be said for corporations. Ask your tax people why a lot of corporations incorporate in Delaware or Florida, or for those off-shore corporations in Bermuda.  But I am slightly degressing.

In tax laws; national and international there are ofcourse absolutes where you have to pay specific taxes to operate.  Then there are situations that depending on how you allocate those taxes, you can get a big variance in what you pay.  This is dependent on your tax professional and their knowledge of local laws.  

>When you say taxation strategy, is this cost different to normal operating costs?
You pay the telco fee no matter what, but you get to allocate it as as an operating cost which is your "write-off".  How you write it off becomes the big difference.  Do you allocate this as a cost here or in Ireland or split the fee; the guys in Ireland and us do not share the same tax rates; tax incentives or anything and a good tax deparment can guide a corporation thru many of the international, regional, state, city tax laws to maximize your tax savings.  It is fairly complicated and a tech (and everyone else except a tax professional) really has no way of navigating thru this process.  Its as vague and dynamic as tracing email flow on the internet for the average user.

So depending on how [the strategy] the tax professional uses that cost in their monthly or quarterly tax assessment is how much you save.  *Tell the tax professional how the circuit is being used, where in the world its being used, and why its being used and they will find beneficial tax situations to help reduce the cost*

That is actually the short of it. Getting back to the original question; I feel that IT should concentrate on ensuring data integrity and %99.999 uptime, loss of connectivity means loss of productivity.  The cost from the IT point of view should be secondary.

The cost, after ensuring the primary mission, should be looked at from you financial group, in this case a CPA with an understanding of your tax laws and international tax laws, will be able to allocate these operating costs as a business expense to the point where that $1.00 that you paid straight to telco becomes $0.75 or less when it figures into the deductions and such for the company.

And easier example is the 3 or 5 year depreciation schedule for your business equipment...

I'm hoping that this did not look lik babble...

Regards,
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Author Comment

by:galtee25
ID: 16424818
Thanks for the reply, I've asked out Finance guys to look into it but they didn't seem too hopefull and as it's a monthly cost it won't help to write it off over time. There is a also a very hefty setup cost. I'll see what they come back with but at those costs it doesn't look like a runner.

On the IT side, so is IP-VPN the only option or are there any other options worth looking into?

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ECNSSMT earned 800 total points
ID: 16433592
OK... domestic and international taxation strategy does get very involved, but enough said about that.

But getting back to our lively hoods.  

For interoffice comunications, especially across regions; it has been all leased lines.  In the banking industry, it is very appropriate as the lines are private and exclusive to the bank itself.  Data is not exposed to any possible intrusions.  VPNs have been used to securely connect local users to their network infrastructure for the purpose of accessing internal applications and services.  I am unfamiliar with VPN being employed on the scale you are looking at, so I defer that to others to answer.  I also have not heard of that being used to that extent by the real estate, education and IT contracting entities that I am familiar with.  

Regards,
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by:galtee25
ID: 16783458
We did some shopping around and got cheaper quotes for a MPLS IP-VPN solution which we are considering going with.

Thanks for comment.
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