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Service providers like Verizon offer WAN services to cut network costs

With budgets tightening, service providers are offering managed WAN services ranging from optimization to on-site maintenance as a way to cut internal costs.

With enterprise budgets tightening, service providers like Verizon are looking to offer managed solutions for WAN services, ranging from optimization to on-site maintenance, particularly as customers shift from frame relay to MPLS.

Verizon Business, for example, announced an expansion of its network services in partnership with CA, ranging from polling and mapping connected network devices to rapidly homing in on trouble spots.

Verizon Business is not the only provider pursuing WAN services, and it may find a receptive audience as enterprises look to cut costs.  

Brian Washburn, research director of telecom services for Current Analysis, said enterprises are adopting managed router services at a historically high rate of 40%.

"You're delving into a very complex and very nebulous territory," he said. "Historically, these sorts of managed network services started with ATM framed relays back in the late '80s."

These early offerings often included on-site services such as router and switch installation and maintenance.

"You'd get a company like GM or Ford saying, 'We don't want to deal with these big complex networks. MCI, you take it over for us,'" Washburn said. "Telecoms have continued to productize these services."

The evolution to Ethernet and IP networks has continued to broaden the scope of what service providers can offer the enterprise WAN, which Washburn said falls into two basic categories.

Managed security has developed largely as a response to the hordes of botnets that -- often with extortionate strategies -- plague modern enterprise networks.

The other category, router services, focuses on the day-to-day tasks of managing networking equipment and software.

Washburn said many enterprises are hoping to reduce internal budgets by outsourcing these services to telecoms, which have more native network expertise and can take advantage of economies of scale.

"Even if there's going to be a big split between enterprises that say, 'We're going to do it ourselves as cheaply as we can,' there will be others that say, 'Let's outsource everything we can and save money that way,'" he said.

The continued enterprise shift from frame relay to MPLS has also given service providers an opening to market services to a potentially wider audience as enterprises consider switching providers.

"[Service providers] are looking to recapture the same customers on the newer technologies," Washburn said. "But there are all sorts of opportunities for carriers, as customers migrate, to capture competitors' customers."

For its latest push into enterprise services, Verizon tapped the software expertise of CA.

Steven Guthrie, senior principal of product marketing at CA, said the announcement was a win-win for both the companies and enterprise customers.

"For Verizon customers, it alleviates them having to acquire, learn and maintain on their site a management tool," Guthrie said. It also allows CA an expanded reach as potential customers, who would otherwise not consider its offerings, can affordably trial them without major capital investments.

An affordable entry-level price point is a key part of the strategy, Washburn said, as Verizon hopes to lure in both medium-sized businesses with the service and enterprises looking to trial before an extensive, expensive full-fledged adoption.

It's a strategy -- by Verizon and other service providers rolling out other managed WAN service suites -- that is likely to resonate among users.

"There are a lot of opportunities coming up," Washburn said, "even as there is price constriction among enterprise customers."

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