ComNet 2000 packed with outsourcing options

By Jennifer Jones and Cathleen Moore
InfoWorld, 01/25/00

Corporate enterprises now have an increased appetite for network outsourcing-a trend expected to play out in new products and services being launched this week at the ComNet 2000 conference, in Washington.

AT&T at the show is poised to make key "outtasking" or managed service announcements aimed at large customers ready to let go of portions of their network operations, company officials confirmed.

And several of Cisco's ComNet announcements-mostly products that combine circuit-oriented telephone services with new packet services-are aimed at the service provider market, which is made up of emerging carriers eager to build telephony options, officials said.

Meanwhile, Nortel President and CEO John Roth said his company will soon formally set up a professional services organization to design and prescribe networking technology for Nortel's largest customers, rather than just sell network hardware.

"We have a very large service organization now," said Roth in an interview. "It was probably close to $1 billion last year, if it had been broken out as a business. But we had never really formalized it as a business."

Now with more corporate customers choosing to outsource their networks in order to spend more time on application development, it is time to underscore the effort, Roth said.

"We are moving away from shipping boxes to fulfilling a network solution. More of our customers are saying 'I want you to design this network, and I want to know the price for a unit of capacity,' " he said.

Seth McGovern, IT manager at SleepMed, a Boston-based sleep disorder clinic, is one of the many networking officials losing interest in the sometimes overwhelming job of building and maintaining a network.

McGovern said he keeps most data in-house but farms out services such as network administration and selecting phone-switching ports.

"I expect my vendors and service providers to classify where I want to be going on WAN security issues and things like that. I put my faith in them to tell me how to route traffic and that kind of thing," said McGovern.

Outsourcing has been creeping into corporate enterprises for some time, but is becoming more visible, as evidenced by the slew of ComNet products geared toward the service provider arena.

"There are going to be a lot more announcements geared at the service provider space this year. ComNet has traditionally been a show focused on the latest router or LAN switch," said Bill Rich, president and CEO of VocalData, a Richardson, Texas-based company that sells to service providers in the IP local exchange market.

Sources attributed the enterprise interest in outsourcing to several factors, including the technical talent shortage and the need for IS departments to focus on mission-critical applications.

"There is one more often-overlooked factor, and that is the rate at which companies are merging with other companies," said Anthony Russo, senior vice president of MCI WorldCom's Global Solutions.

After a merger, the combined company is expected to be quickly up and running with no time to marry infrastructures, according to Russo.