The Mystifying Struggle to Mix Enterprise and SP Infrastructure

J. Caron

J. Caron

Summary Bullets:

  • The “golden thread” linking carrier infrastructure and enterprise CPE for managed services is a myth.
  • There should be added value, but most suppliers have failed to deliver it.

It seems to be such a straightforward, simple proposition. Service providers build managed network and application solutions using a certain supplier’s infrastructure, and the resultant service is terminated elegantly and powerfully with enterprise premises infrastructure from the same supplier. Goodness flows liberally in this setup, through supplier-specific value-add features, increased manageability and better security. The evidence suggests, however, that this rarely happens. The managed services golden thread is a myth.Precisely one supplier—Cisco—has consistently and profitably driven enterprise CPE business through service providers that also use its infrastructure to offer WAN, VPN and IP telephony services. This, however, has nothing to do with any technological magic that might make the Cisco customer premise gear more useful when supported by service providers using its infrastructure. Rather, it is a function of Cisco’s likely existing presence in the enterprise, making it an attractive go-to-market partner for the service providers. It is about sales leads and relationships, and not technological capability.

Last week, Alcatel-Lucent backhandedly reaffirmed its commitment—again—to making a real effort to drive enhanced enterprise applications capability by tighter integration with the ALU carrier infrastructure business. The company announced plans to sell-off the valuable Genesys contact center solutions business, but is keeping the enterprise network and business communications infrastructure bits. ALU has stellar relationships with service providers at the very highest levels, but—with a few exceptions—has failed to leverage those relationships to deliver better solutions for enterprise customers via ALU-fueled managed network and application services. I wish them luck with this new-but-desperately-battle worn endeavor, while noting pessimistically that their carrier business arch-enemies—Ericsson and Nokia Siemens Networks—gave up the ghost on the enterprise golden thread long ago.Enterprise network and IT managers should keep pushing, though. There really should be enhanced value—both financial and in terms of capability—through the use of CPE that integrates intimately with carrier service capabilities. Cisco itself could do a much better job of demonstrating this with, for example, managed VPN and security services. Soon, too, Cisco will have company. In addition to ALU’s apparent renewed efforts, the carrier managed service influence is a key element of Juniper’s enterprise strategy, and it will certainly be a part of Huawei’s emerging enterprise play, as well.

Do enterprise network and IT managers really care what CPE they use in a managed services arrangement? While the historical evidence suggests not, and the industry’s track record of success is discouraging, we’re going to see the suppliers keep trying.

    About Jeremiah Caron
    Jeremiah Caron brings more than 24 years of experience to Current Analysis as a market watcher and influential voice in the telecommunications and information technology industries. As Senior Vice President, Analysis, Jeremiah is responsible for overall management and content direction for the company’s CurrentCompete services, and is part of the corporation’s executive management team. Jeremiah is responsible for monitoring and evaluating activities in consumer services, enterprise technology and software; network and IT services; and service provider infrastructure markets, focusing on the strategies and product development work of service providers, technology suppliers and solution providers.

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