The Short List Our recommendations. Hints for striking a good deal How to manage your outsourcers Management tips from the trenches

By James Kobielus
Network World, 11/11/96

Vendors of all kinds are jumping into the outsourcing arena. All types of carriers and computer vendors are transitioning internal service organizations, once focused only on handling their own offerings, into business units aimed at installing and managing all forms of multivendor networks. Likewise, systems integrators are now offering to provide ongoing network management services once they complete a turnkey installation project.

They compete against established players, powerhouses such as AT&T Solutions, Computer Sciences Corp. (CSC), Electronic Data Systems (EDS), IBM's Integrated Systems Solutions Corp. and MCI Systemhouse, formed by the recent merger of MCI Communications Corp.'s outsourcing arm and SHL Systemhouse, Inc.

The vast number of players in the market makes it difficult, if not impossible, to take a definitive census of the industry, much less include all the vendors in a single Buyer's Guide. However, we invited more than two dozen of the top outsourcing firms to supply information about their companies and services for the chart on page 45. A number of key players, including CSC and EDS, declined our invitation, often saying the requested information was proprietary.

But our research made it clear that a great number of network outsourcers got their start by offering services that support or extend a related business. This is important to know because their current strengths are typically still in that core area.

For example, local and long-haul carriers have diversified from their roots of providing simple voice and data transport. Carriers such as AT&T, via its AT&T Solutions division, and Ameritech Corp. are now more than glad to design customized voice, data and video networks for your company; overlay and implement that design on their public network infrastructures; and then manage the whole thing for you.

Computer vendors that have long provided hardware and software plus information technology (IT) outsourcing, such as Bull HN Information Systems, Inc., Digital Equipment Corp., IBM and NCR Corp., are now installing, configuring, and even running entire LANs and WANs. Increasingly, these vendors are pushing beyond data networks into supporting voice, video and multimedia.

That melding of IT and network outsourcing appears to be a benefit for you. ''A good percentage of network outsourcing contracts include application development, client/server migration, data center management and other IT functions,'' says Alexandra Whitehead, practice leader in IT outsourcing at G2 Research, Inc., a consulting firm in Mountain View, Calif.

However, IT tasks such as developing application software and running the corporate data center still account for 60% of the $40 billion spent by U.S. firms on IT outsourcing this year, according to the Outsourcing Institute, a nonprofit group in New York. Network and desktop management make up the balance.

Then there are systems integrators that have taken on network management as a related service offering. BBN Planet, Cap Gemini America, CSC, EDS, Entex Information Services, Inc., International Network Services (INS), Paranet, Inc., Racal-Datacom, Inc. and Systems Management Specialists fall into this category.

Many of the systems integrators concentrate on data networks. However, they are increasingly seeking voice network outsourcing work and often team up with carriers to get it.

A good example of this is the Pinnacle Alliance, which is an attempt to bond the IT consulting, application development, and system integration expertise of CSC and Andersen Consulting with the telephony know-how of AT&T Solutions and Bell Atlantic Network Integration. Another example is the alliance between IBM and Ameritech's GlobalDesk network management outsourcing business.

Systems integrators that are getting into outsourcing come in all sizes and specialties. Some of the firms with more noteworthy specialties include BBN Planet, a traditional Internet access provider that has branched into Web site development, Web server hosting, firewall monitoring and electronic commerce support; Entex, a desktop systems integrator that now provides remote and on-site WAN/LAN monitoring and support services; and INS, a systems integrator that manages network services for public carriers and now offers network consulting as well as design services to end users.

Of course, there are firms that remain true to their original charter. NetSolve, Inc., which offers a wide variety of WAN monitoring services, is an example.