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Managed Services 3.0 : End Users Feeling the “-tion” Effect

For managed services providers, a combination of market forces for today’s end user businesses have combined to create a ‘tipping point’ that offer a new opportunity for a variety of providers to capitalize on the promise these services. These forces include changes in the business environment which are making customers more receptive to the idea of ‘out-tasking’ specific day-to-day responsibilities so they can focus on their core business and more strategic business initiatives. At the same time, advancements in remote network management technology are also making it possible for xSPs to deliver more robust managed services to a broader set of potential customers.A series of macro-market trends have combined to fundamentally change customer attitudes about managed services, and create a new opportunity for innovative MSPs to deliver differentiated solutions to their customers. Some of these can only be done by an xSP or at least done more efficiently.

  • Globalization and e-commerce have opened new opportunities for business expansion, and created new competitive pressures for companies of all sizes, but have created the need for global delivery of services.
  • Acceleration of new applications such as mobility has permitted workers to do their jobs anywhere, and created new challenges encouraging employee collaboration and protecting valuable data.
  • Escalation of application access, performance and reliability expectations of workers at all times from wherever they are.
  • Expectation of cost savings and improved efficiencies for IT delivered as a service.

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Visual Networking – A Communications Mode-Meld

The Vulcan symbol represents the philosophy of Infinite Diversity in Infinite Combinations (IDIC)Did Star Trek foreshadow social and visual networking? Could it actually serve as a bit of a Nostradamus for this and future generations? Stay with me now, because I think yes.. Remember the Vulcan mind meld? It was”a procedure that involved physical contact with a subject (though instances of mind-melds without contact have been seen, according to my trekkie friends -if you ask them they will you about it in great detail…), making it possible to share thoughts, experiences, memories, and knowledge with another individual.” Voila, collaboration of the highest order. And, with the integration of video into this equation, the world of communication and collaboration will be life and business expanding. In a sense, it’s a path to meld the various modes of communication together seamlessly throughout all aspects of our Connected Lives, at home, at work, and on the move.It’s no secret we’re on a path to uber communication and collaboration. First it was text. Then is was two-way communication. Then audio and sound joined along and even video. But, now it’s a mash-up world where visual networking is more than a two-way street. In the oft-cited work by Dr. Paul Lester, attribution is given to educational psychologist Jerome Bruner of New York University for finding that”persons only remember ten percent of what they hear, 30 percent of what they read, but about 80 percent of what they see and do.” In other words, seeing is believing and retaining.As a result, visual networking will play an even greater role in the way that we communicate going-forward. And, it will place increasing demands on bandwidth and quality. A truly connected life must ride within an intelligent network that will adapt, expand and prioritize to help realize the full impact that visual networking can offer.

Managed Services 3.0

“œAnother X.0 expression”, you say.”How original.”Certainly, the trend du jour is to update a way of doing things and label it with an”X.0″ after most any phrase or expression. But, you know, I’m not ready to abandon the logic for the sake of a new fad that is obtuse or overt”marketing bull.” I really tried to avoid it, REALLY, but for managed services, the taxonomy works rather well. So, here goes-”œManaged services” is one of those terms which has meant many things to many people. The lack of a generally accepted definition of managed service has contributed to its slower than expected growth in the past. The history of managed services can be summarized as:

  • Managed Services 1.0: The first generation of managed services in the 1980s consisted of highly customized network outsourcing arrangements designed by the telecommunications carriers to meet the needs of a select group of large-scale corporations.
  • Managed Services 2.0: The second generation of managed services emerged in the 1990s when a new class of independent service providers tried to sell remote monitoring services to small- and mid-size businesses (SMBs).

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Cisco Leads Managed Services Market Share

Cisco’s market leadership is no longer the “best kept secret” in managed services. Today, in its inaugural Total Managed WAN (CPE) and Network Based Services Equipment Market Share report, leading research firm Synergy Research Group, outlined vendor market share for managed CPE and network based services in the enterprise, SMB, branch and high end environments. It shows market share by quarter from the first calendar quarter of 2007 through the first calendar quarter of 2008. The results outline Cisco having a 68% market share in total managed WAN (CPE) and network based equipment services revenue for the first quarter of 2008.This report certainly underscores the enormous preference and loyalty shown by successful managed services providers worldwide for Cisco as the partner of choice for their managed services business. As previously announced, the managed services market is growing and offers benefits to business customers and xSps, alike. And, businesses that choose a managed service from a Cisco Powered xSP receive the benefit of experience from the worldwide leader in managed services that is focused on:

    1. Offering market leadership in IP-based networks and solutions that serve as the foundation for existing and emerging technologies that define the business and end user experience. 2. Engaging with xSPs to understand the market and then to develop resources, technologies, programs and insight that help them envision, build, operate, market and sell managed services.

Certainly, as we look to the growing managed service market, a unique opportunity exists for xSPs to extend their leadership and benefit from the technology and managed services enablement offered by Cisco.

Next Generation Mobile Networks: Industry leaders on challenges ahead

NGMN logoLast week in Frankfurt, I participated in the second industry conference organized by NGMN. The session opened with speeches by the Hamid Akhavan, CEO of T-Mobile, Vivek Badrinath, CTO of France Telecom/Orange, and Steve Pusey, CTO of Vodafone. Each spoke about the challenges ahead, and some common themes emerged, including royalties, backhaul, and self-organizing networks.Royalties for intellectual property are a key concern. The next-generation mobile network-the Mobile Internet-must support devices beyond simple mobile phones. New devices like the iPhone, of course, and laptops, but the operators also hope to attract innovation from the consumer electronics industry. Imagine a wide range of mobile entertainment devices, for music, video, and games, handheld or in vehicles. Yet the business case for developing such devices would be overwhelmed by the typical royalties of the mobile industry. Current 3G device manufacturers pay over 25% of the retail price in royalties (unless they have patents of their own to balance the negotiation). In contrast, the patent royalties for an MP3 player run only 75 ¢ per unit. Consumer electronics firms are unlikely to introduce mobile products if the business case includes handing over a quarter of the revenue for just the mobile interface, a relatively small component.The NGMN IPR Plenary is seeking to address this concern by asking patent holders to submit anonymously the royalty rates they expect. A trusted third party then aggregates all the royalty expectations and reports back the total. So far, the total still resembles higher mobile rather than lower consumer electronics royalties. And more royalties for older cellular technology (GSM, CDMA, 3G) might also be required if those are included for backwards compatibility. The negotiations continue though opaque layers of technical and legal jargon. Leaving existing royalty models won’t be easy for net collectors like Ericsson and Qualcomm, but such a change would unleash new business by accelerating the Mobile Internet.Backhaul from cell sites is another concern for operators. Historically, highly compressed mobile voice calls required limited bandwidth, and the air interface was the bit-rate bottleneck. Thus, a typical cell site could be connected with just one or two T1 or E1 lines over copper or microwave. Increasingly, laptops cards are multiplying traffic exponentially (and VPN encrypted traffic cannot be compressed), while next-generation radios are removing the air interface bottleneck. Just adding more T1/E1 lines would cause operator costs to outpace revenue. The eventual solution to this challenge seems to require fiber to the cell site, architecturally aligned with Carrier Ethernet. The migration towards this architecture will involve cell-site routers that multiplex circuit and ATM traffic from legacy base stations with new native IP traffic. This change is part of the broader trend toward flat IP architectures for mobile networks.Self-organizing networks promise to lessen operational concerns. Existing cellular networks require much manual configuration and optimization to ensure neighboring cell sites work properly and hand off connections successfully. As next-generation mobile networks grow, such manual tasks would greatly burden the operator. Instead, the radio and network components should interact among themselves, to configure and tune the mobile system automatically in real time. (For historical precedent, consider the migration from IBM SNA networks, which required substantial sysgen configuration, to TCP/IP, which substituted automatic routing protocols.) Self-organizing networks are often associated with mobile ad-hoc networks, but the discussion at this conference flowed more from femtocell developments. To succeed in the mass market, femtocells will require plug-and-play installation by consumers in their homes. Radio and network parameters must be configured and tuned automatically. Presumably, the same techniques can be scaled to macro base stations in the next-generation mobile network.My presentation, Service Delivery in Next Generation Mobile Networks, discussed how mobile operators can introduce new services. It contrasted mobile industry systems like IMS with Internet ecosystems for Web 2.0, drawing on themes covered in previous posts to this blog. (About IMS, Mr. Pusey cited the old joke about mixed feelings, “like having your mother-in-law drive off a cliff in your brand new Ferrari.”) I described new capabilities for enterprise customers, like VPN and web conferencing, and suggested consumers will extend social networking using mobile. Anthony Berkeley, Alcatel-Lucent LTE Business Strategy manager, offered the wry observation that everyone at the conference was too old to anticipate the popular services on the next-generation mobile network, as teenagers will most likely set the trends. With that, I was ready to return home to ask my children about the future of the Mobile Internet.