Monday, December 8, 2008

Global Enterprises Opting for Managed Network Services


I'm going to pull a Paul Harvey on my colleague Joe Panettieri. He wrote a couple of weeks ago about the managed service offerings of companies such as Verizon and Cablevision. For those readers outside the U.S. who don't know radio commentator Harvey, one of his catchphrases is to talk about "the rest of the story."

In this case, it's the number of global enterprises who are signing deals with carriers to manage their networks. Since the time of Joe's story, there have been at least five announcements by major U.S. or global entities opting for large managed services contracts -- and those represent only the customers who were willing to announce the deals.

The first deal to catch my eye was Indianapolis Power & Light's three-year contract with AT&T for integrated network solutions between multiple offices and generation plants, announced November 24th.

Now, managing a network in central Indiana may not seem earth-shaking, but IPL is a subsidiary of AES, a $13.6 billion company based in Arlington, Va., that has a global workforce of 28,000 in 29 countries on five continents.

Then I saw that, four days earlier, AT&T had announced a $346 million contract to manage the WAN, LAN, and VOIP capabilities for the state of Georgia. And the week before that, online investment firm Scottrade had expanded a deal with AT&T for both network services and business continuity.

New Market Momentum
And the announcements keep on coming. This week alone, two more billion-dollar global entities announced managed services deals.

Daimler AG, the €99.4 billion manufacturer of Mercedes automobiles and Freightliner trucks, among other vehicles, hired Verizon Business to deploy and manage an IP network for its operations in Africa, Europe, the Middle East, and North America.

The Elster Group, based in Luxembourg, hired British Telecom to manage the network for its operations in 38 countries across North and South America, Europe, and Asia.

Moving Further into the Mainstream
The moral of the rest of the story is clear: when billion-dollar companies start signing up for managed services contracts, the days of early adoption are over. These entities don't sign contracts like these unless they're more than confident about the ability of the aforementioned providers to keep them up and running in a 24-hour world.

As the analysts like to say when a market takes off in a sharp upward angle, it looks like we're heading into the hockey stick portion of the show.

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