Telcos to threaten SIs in battle for the enterprise

Telcos to threaten SIs in battle for the enterprise

In a bid to carve out more revenues from enterprise customers, telecommunications carriers will provide a plethora of new services that are traditionally the domain of the channel, according to a high-level Cisco engineer.

It's long been touted that while the amount of voice traffic is increasing, voice revenues are in a tailspin. In order for telcos to survive, they will have to provide a range of converged services, from data access and hosting to full-blown outsourcing.

At least, that is the vision of Michael Boland, a senior consulting engineer at Cisco, who opened the networking giant's 10th annual gabfest "Networkers" in Brisbane today.

Boland's keynote address espoused the collective vision of Cisco and his own 21 years in the industry, a significant part of which was spent as a systems integrator for Network Solutions Australia.

He claims service providers are faced with deregulation, globalisation and the challenge of leveraging the technology that drives the Internet (IP) but not at the expense of their legacy parallel (voice and data) networks.

"Service providers have only two knobs they're faced with. One is to wind down costs, the other is to turn on new revenues," he said. "They can increase revenues by bundling [voice and data services] but this won't work in the long term because effectively they're commoditising more of their products. So the answer is in finding new services markets."

To differentiate themselves and prevent customer churn, Boland claims carriers will be forced to offer outsourced services such as security and storage over a platform of high-bandwidth converged voice/data networks.

Meanwhile, enterprises will be demanding stricter service-level agreements, which will give them visibility of the state of their networks and the security that protects them, Boland said.

The challenge for systems integrators, ISPs, managed service providers and other service-centric companies in the channel will be how to work with telcos and customers to secure their chunk of the enterprise pie.

ARN explores the telco threat in next week's issue, out on March 13.

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