With a managed multiservice solution, a carrier is better positioned to solve the enterprise's business problem than with first-generation managed network services. A carrier is also better positioned to increase operational efficiency, contain capital costs, and differentiate itself from the competition (see Figure 1). As a result, the carrier has a greater opportunity for long-term revenue growth.

Figure 1. Differentiation and Value and Margin in Managed Multiservice Solutions

The performance demands of end users continue to increase at an unrelenting pace, largely fueled by an explosion of IP traffic over the wide-area network (WAN). A dramatic increase in the sheer volume of IP and other types of traffic is accompanied by a staggering degree of network complexity. Gone are the days when WANs were designed for employees to send e-mail within a corporation. Enterprises are now building networks not just for their employees but for customers, suppliers, and partners. Networks must support live transactions across great distances and around the clock. Furthermore, service options include not just leased lines but frame relay, asynchronous transfer mode (ATM), integrated services digital networks (ISDN), and IP.

At the same time, the pace of technology advancement continues to accelerate. Choices among various types of equipment are increasingly difficult to make. Each investment assumes a higher risk of becoming obsolete than before. In the face of such complexity and constant change, network managers must meet user demands while containing costs.

How to Solve the Enterprise Problem

The current generation of offerings are single-service, but a single-service solution only addresses a short-term problem. The enterprise needs a long-term solution for reducing complexity, keeping pace with technology, and increasing flexibility and control. A multiservice offering provides such a foundation; it gives the carrier a cost-effective basis for meeting enterprise needs in the long run.

It is no accident that managed network services have become an attractive option. They enable network managers to focus more on strategic planning than on day-to-day operations. Network managers are also able to avoid the capital and operating costs associated with technology obsolescence. Managed network services also enable information technology (IT) departments to devote more resources to upper-layer applications than on the underlying network infrastructure. In short, a combination of business and technology forces have converged to create a complex set of problems for enterprise networks. Carriers have recognized the market opportunity and have responded with the current generation of managed network service offerings.