The Outsourcing Institute's On-Line Library Includes results from the Institute's latest Trend Report, statistics on outsourcing and an archive of outsourcing articles. Outsourcing buyer's guide Tips on developing an outsourcing strategy, selecting a provider and managing your contract, Network World, 11/11/96. USWeb buys six of its affiliates A look at one Web outsourcer, Network World, 4/21/97. Wetzel is director of Internet consulting at TeleChoice, Inc., a consultancy in Verona, N.J., that helps service providers and vendors develop and deploy Internet and intranet marketing strategies. She previously was director of marketing at BBN Planet, where she launched a series of groundbreaking Internet and intranet services. She can be reached at rwetzel@ telechoice.com.

By Rebecca Wetzel
Network World, 6/2/97

With intranets the hottest thing going, companies offering to help build, host and run your intranet are coming out of the woodwork. Your challenge is twofold: to determine whether it's a good idea to outsource at least some of your intranet needs and to figure out which type of company can best do the job.

A variety of players are vying for your business, including Internet service providers, interexchange carriers (IXC), regional Bell operating companies and systems integrators. ISPs are offering IP-based virtual private network (VPN) services plus internal Web integration and hosting services. IXCs and RBOCs are offering a similar suite of services. Systems integrators, as always, will see to your every need - for a handsome fee. Also, start-ups such as USWeb Corp. are cropping up specifically to offer Web services, expanding choices even further.

Among the ISPs offering intranet services are big players such as UUNET Technologies and PSINet, Inc. and some smaller entrants such as Concentric Network Corp. A number of IXCs, including AT&T, MCI Communications Corp. and Sprint Corp., are in the business along with RBOCs, including Pacific Bell and US WEST, Inc.'s !nterprise subsidiary.

Weighing the pros and cons of the suitors shows that as a class, ISPs bring more to the intranet table than the other types of service providers. The reason is ISPs can apply more relevant skills to the job than traditional carriers and systems integrators, including the new genre of Web-centric systems integrators. This is entirely logical. After all, intranet services grew from Internet technologies, in which ISPs happen to be expert.

But before exploring the viability of handing over your intranet to anyone, you've got to feel comfortable with the concept of outsourcing - period. Reasons to outsource vary. Foremost is cost savings, which can be compelling given the economies of scale outsourcers generally provide.

For example, going with a VPN service provider for intranet connectivity, including transport and equipment (but excluding local loops), can yield savings of 20% to 40%. Savings are even higher when you factor in labor and overhead for 24x7 network operations and support.

Another reason for outsourcing may be that you can't or don't choose to compete for the limited number of people trained to deploy or expand your intranet. And your service provider probably is better able to deploy sophisticated network management tools that would be out of reach if you were going it alone.

A big key to outsourcing is trust. When you outsource your corporate intranet, you are entrusting a critical business function to an outside party. You must feel at home with the thought of giving up control of your intranet, and that done, you must find an outsourcing partner that is deserving of your trust.

Once you've made the decision to buy and not roll your own intranet, the next step is to choose the type of provider: IXC, RBOC, ISP, traditional systems integrator or Web-focused start-up.

Among IXCs, intranet services are becoming de rigueur. AT&T, Sprint and MCI all have announced intranet offerings. Among RBOCs, intranet services are rare, with US WEST's !nterprise and Pacific Telesis among the few in the game. Systems integrators approach the intranet outsourcing market as they do any project: They will work on a custom basis for a fee.

Web-centric systems integrators like USWeb are making their mark by concentrating on the technical and business aspects of deploying Web-base applications in an intranet. Notably, most of the packaged intranet outsourcing offerings are recent arrivals on the scene, unveiled within the past year. That means it's too soon to say for sure, but eventually they will likely be important players in the Web integration niche.

Protocols and applications

With the ubiquity of the Internet, you might think this knowledge is widespread among service providers. It's not. All providers are not equal when it comes to this specialized knowledge. The key is to not become a guinea pig for a service provider learning the technology on your nickel.

As a group, ISPs know more about data communications and TCP/IP than most of their telco counterparts. ISPs, after all, are in the business of providing IP data services that go further into a customer's data environment than most telco services. Although knowledgeable about wide-area data networking, most systems integrators are just now learning the inner workings of Internet applications.

A significant number of folks in the ISP community were responsible for building the Internet, so as a group ISPs understand the technology more intimately and are likely to be able to put their knowledge to work for you more easily than telcos or systems integrators. (Yeah, we know -Vinton Cerf is at MCI. That helps, but one guy can only do so much.)

Telcos, on the other hand, are fundamentally creatures of telephony and habit. Although many of them have been offering data communications services for some time, as a group they are voice-centric and have been excruciatingly slow in developing the knowledge and skills to support data services that address Layer 3 and above.

Customer support and network operations

Support capabilities among ISPs vary dramatically, so it's impossible to say ISPs as a group fare well regarding the professionalism of network operations centers and customer support staff. In this area, telephone companies may well have the lead. But without the specialized knowledge to help clients, the fact that the support staff is professional does not mean that your needs will be served adequately.

Performance guarantees can help ensure that your needs are served, and they should be on your wish list - definitely ask for them. But be forewarned: You can't expect to get performance guarantees from service providers that deliver intranet service over a shared infrastructure. Such guarantees are possible over a private network, but they are the Holy Grail of virtual private intranet outsourcing services.

Latency guarantees are hard to come by because they're hard to implement. UUNET, for example, announced its ExtraLink intranet service in December but slipped the general availability date from February to June because it is having trouble living up to its latency guarantee of 150 milliseconds or less.

On the other hand, network availability guarantees for virtual private intranets are more common because with a well-engineered backbone, it is relatively easy to deliver on what's promised. UUNET, for example, ensures 99.9% service availability and hasn't had a problem living up to it.

If your service provider does have performance metrics, be sure to ask whether it has the means to measure performance. Sprint, for example, offers what it calls performance ''objectives'' as part of its Intranet Service but leaves it up to the customer to measure how well it is performing relative to those objectives. Not good. It shouldn't be up to you to determine how well your service provider is doing.

UUNET, however, monitors performance based on the customer's actual experience at each site. That's a better model. Your vendor should measure its performance at your site and keep ongoing performance records for your review.

Comprehensive service

Some intranet service providers in both the ISP and telco camps offer turnkey installation and management of customer premises equipment (CPE). Because telcos tend to have larger field support engineering staffs, they have a potential advantage in provisioning CPE. However, this does not mean field engineers have the knowledge necessary to do a good job of it - most are new to managing CPE such as routers.

More important than on-site support is the ability to monitor and troubleshoot the intranet at least up to your LAN connection - assuming you have dedicated and not dial-up connections. An ISP is likely to be more skilled at managed Internet connectivity for business clients than a telco. It's important to add, however, that telcos have more experience dealing with physical layer problems than ISPs.

Getting down to price

Web hosting services is an area where ISPs or Web-focused systems integrators reign supreme over the telcos. But the telcos will get the hang of it over time, so stay tuned - they may be on par with the others within 18 months.

ISPs and Web-centric integrators are savvy about Web site integration and management, but Web site design requires graphic arts skills, which are not the forte of these players. To meet your graphic design needs, you should seek a separate partner. Keep your eyes open for sites you think are best-of-breed and find out who designed them.

If the ability to deliver services across local access and transport areas is an issue for you, the RBOCs are at a serious disadvantage compared to ISPs and IXCs. Until deregulation fully takes hold, RBOCs can't deliver services across LATAs. If this is important to your intranet, you may have reason to shy away from RBOC offerings.

To date, pricing of intranet services are comparable for ISPs and telcos. Prices for intranet connectivity from both, for example, average around $2,000 for each T-1 connection, $500 for each 56K bit/sec connection and $3 per hour for each dial-up site. As with Internet connections, local-loop charges are passed through. Expect service from systems integrators to be more expensive because they won't have the economies of scale of a packaged service delivered to multiple clients.

In assessing the value of an outsourced intranet, you should factor in whether your outsourcing partner can do the job as well, if not better, than you. If so, then outsourcing the function at a 20% or higher savings should yield sufficient value to support a decision to proceed.

The gist

Compared to most telcos, however, ISPs are new kids on the block. Because of this, some ISPs don't have their processes and procedures honed as well, and their service quality may not be as consistent as telcos. Systems integrators, because of their expense, probably are not your best alternative.

All things considered, the ISPs delivering business-grade service are your best bet because they bring more relevant skills and services to your intranet than other types of service providers. This makes sense since intranet services have more in common with Internet services than with the voice services that are the core competency of most telcos.