The 10 most powerful companies in networking

Network World’s top columnists tells what makes each of these 10 companies the biggest power players in IT.

AT&T: THE CARRIER COLOSSUS

By Frank Dzubeck,

keeps getting bigger but still is managing to execute on all cylinders. It is earning accolades from financial analysts and seeing its stock price rise (buoyed by a potential 10% dividend increase and a $10 billion stock buyback).

During the last nine months, AT&T’s wireline business revenue exceeded $43 billion. The last nine months’ revenue for Cingular Wireless, which AT&T expects to own fully after it acquires , exceeded $27 billion. Projecting revenue for this last calendar quarter at $16 billion for AT&T and $10 billion for Cingular results in a staggering $96 billion annual run-rate. Voice revenues (54.5%) still drive AT&T’s balance sheet, but data revenue (28.5%) is growing from quarter to quarter.

Look at these statistics for perspective on AT&T’s stature: Its global backbone network comprises more than 535,000 fiber route-miles handling 7.6 petabytes of data traffic per business day; it hosts 30 Internet on four continents, five global network operations centers and 10 global customer-support centers; and it has almost 100,000 access points in 150 countries, as well as strategic relationships with 190 carriers.

Throughout its divestitures, mergers and acquisitions, AT&T never lost its corporate-customer focus. During 2006, AT&T expanded its security portfolio to more than 10 services and launched 24 services directed at corporations. Among the carriers, AT&T now has one of the broadest portfolios for corporate-customer services, with options for everything from management to managed . Particularly noteworthy for 2006 was the extension to 23 cities of its Opt-E-MAN virtual private LAN service, which has received Cisco certification.

During 2006, AT&T acquired USinternetworking, an application service provider. In 2007, AT&T intends to focus the wholly owned subsidiaries of Sterling Commerce and USi at the corporate service-oriented architecture marketplace.

Although the future looks rosy, one key issue stands in the way of even bigger success — the BellSouth acquisition. AT&T still awaits approval from the FCC, which opted not to discuss the issue at its Dec. 20 meeting. Presuming the deal gets the OK after the new year, integrating the BellSouth operation will be a dominant challenge for 2007.

Regardless, AT&T is well positioned with management, resources, services and strategy to make 2007 an even bigger and more successful year.

Dzubeck, president of Communications Network Architects, can be reached at fdzubeck@commnetarch.com.

CISCO: THE INDUSTRY JUGGERNAUT

By Frank Dzubeck,

A company as powerful as deserves a metaphor. You could call it a juggernaut battleship crashing through the waves of the marketplace, seemingly unreachable by the competition. Or, because the network industry seems to have a love/hate relationship with Cisco, you could compare it with the New York Yankees (except there is no network industry equivalent in sight for the Boston Red Sox).

No matter how cynical these metaphors seem, they accompany a message of respect and admiration. The fact is, the industry is rank with competitive jealousy because Cisco is besting the competition on two basic financial fronts: revenue growth, at 18% vs. 14% for the industry; and operating margin, at 27% vs. 10% for the industry.

During the last few years Cisco’s revenue has grown at a healthy 13% to its present level of $28.5 billion for fiscal 2006. Financial analysts have even greater expectations for fiscal 2007, when organic revenue growth is projected to be 14.7% to $32.7 billion. Most interesting is the slow but steady shift in the source of this revenue.

While Cisco continues to receive 85% of its revenue from products and 15% from services, its revenue from routing and switching products is declining and its revenue from advanced technology products — such as those for home networks, , IP telephony, and — is increasing. Advanced technology products accounted for 16% of Cisco’s revenue in fiscal year 2005 and for 20% in 2006, and now is running at 23% for 2007. The company’s advanced technology strategy is working brilliantly to diversify its revenue stream, protecting it from the next market bubble.

As it shifts to advanced technologies, Cisco must have a comprehensive strategy for enterprise services. Now, for example, it has life-cycle services that help enterprises both prepare and optimize their networks; technical services that keep networks operating efficiently and up-to-date; and remote operations management services. Plus, it has 35 deep products and services for numerous vertical markets, including financial services, healthcare and manufacturing.

Although Cisco spends more than $3 billion per year on R&D, all eyes are on its mergers and acquisitions. It has acquired more than 100 companies since its inception, including nearly 12 in 2006. Now that it has learned to finance acquisition through debt (Scientific-Atlanta, for example), no IT company with a significant installed base and revenues is safe.

With all this, a constant stream of criticism is directed at Cisco. Customers complain about prices and product reliability, partners about external competition, value-added resellers about low margins, and the competition about predatory marketing and sales practices. In truth, it is simply jealousy, the wake of power.

Dzubeck, president of Communications Network Architects, can be reached at fdzubeck@commnetarch.com.

EMC: the house that storage built

By Howard Anderson,

By rights, shouldn’t exist. It began life selling memory cards via telemarketing, morphed into the technical leader in disk storage while , StorageTek and were asleep at the R&D switch, and then built on its unique ability to acquire strong niche companies and not screw them up.

Can EMC extend its dominance into the right new areas of IT? Competitors have awakened from their technical slumber, and upstarts are nipping at its core market, itself a victim of Moore’s Law. EMC has to sell 30% more storage each year to grow 10% in revenue, as the cost per bit drops 13% to 15% a year, compounded.

Look at EMC from a customer’s point of view. A CIO of a financial services company put it this way: “I have over 100 in my shop. Every time I turn around my IT people are off to some users’ meeting, usually in Florida. I want fewer vendors, and I want more from them!”

What is he really saying? First, that he is tired of being the systems integrator for all these disparate parts and he wants vendors that can make all of their parts work seamlessly together. Second, he is saying that “piece parts vendors” with just a slightly better solution will be on the outside looking in. And third, he implicitly is throwing down the gauntlet to EMC: Are you ready to become a truly strategic vendor — with entire solutions — or just a tactical one?

Therein lie EMC’s strategy and its challenge. Early technology made the firm, so it had to be first-rate in engineering. Now it is mastering two new disciplines — financial engineering and technical integration. It has bought a gaggle of firms since 2003, pretty much saying it would rather buy good technology — which brings with it a customer base and a trained sales and service organization — than spend 10 years trying to make it. And with the Nasdaq still down and the stock market acting rationally, acquisition finesse becomes a valued skill.

Make no mistake about it: If EMC is going to move into the rarified altitude of a strategic vendor, acquisitions aren’t a nice-to-have, they are a have-to-have. To most IT honchos, storage is boring, right? But it isn’t boring if you are a financial industry CFO and know you’d better keep every e-mail since the beginning of time or be in violation of your requirements. And storage isn’t boring if data backup can’t get you to recovery management.

What is Act 2? EMC is vulnerable, because it cannot match the hordes of IBM and HP consultants helping customers find their way. So it must pick tangential areas for expansion intelligently. The first new areas were those where storage is integral, such as content management, through the Documentum acquisition, or enterprise storage management, through the purchase of Legato Systems. Now ,with the purchase, EMC has moved into security and recovery management and opened another door into the corporation.

EMC gets more than half its business from areas other than storage and is calling itself an information infrastructure company, which tells us — nothing.

But it can see the issues: Corporate networks are complex that cry out for help and need root-cause analysis to fix; corporate officers want to drive down the cost per transaction and increase availability; corporate customers want to push the right data down the pipe for new Internet applications.

There are only a few really strategic vendors to corporations — IBM, HP, , SAP and Cisco. is a special case (and an EMC partner). EMC has the opportunity to play right up there with IBM and HP, if it keeps its storage users happy — which means big R&D spending — if it can buy the right companies at the right price, and if it can integrate the product lines seamlessly.

Anderson, founder of Yankee Group and co-founder of Battery Ventures, is the William Porter Distinguished Professor at MIT. He can be reached at handerson@mit.edu.

HP: LOTS OF DIRTY LAUNDRY, BUT STILL POWERFUL

By Mark Gibbs,

Until September, public face was looking pretty good. Under the leadership of CEO Mark Hurd, HP was starting to see a revitalization of its business that could have made it bigger than . HP’s marketing and sales were going great guns, and the company seemed to be doing everything right. But that rosy outlook was about to run into a brick wall.

When the smelly stuff hit the whirling blades, what emerged was a pretty pathetic and sordid tale of board-level silliness that defied belief. On discovering a , the board’s chairperson, Patricia Dunn, instigated an investigation to find the guilty board member. This was no less than a witch hunt, involving illegal data-gathering, surveillance and covert investigation. “Colossally stupid” is how the California attorney general wound up describing the affair.

As a result of this whole mess, one director was ousted, Dunn stepped down to become a director, and Hurd became chairman. Despite the furor and much to everyone’s surprise, the company’s share price experienced an unabated rise over the entire last year, and the boardroom fracas hardly made a ripple on the chart.

Hurd’s sales and marketing strategies really are working. According to Yaser Anwar, a contributer to StreetInsider.com, “Nearly 80% of HP’s profit increases over the last two years can be attributed to its Enterprise Servers & Storage and Personal Systems Group divisions, due to revamped product lines, cut costs and set prices to maximize profitability rather than revenue.”

HP is set on a strategy that focuses on profitability, and its products show a real technical and marketing edge in the and blade markets. While those edges can — and most likely will — be eroded over the next year or so, HP won’t be standing still; unless there are major market disruptions, the company should be able to maintain its growth and at the least keep its market share.

The company’s biggest threat is . To address that threat, HP is starting to make aggressive moves that could change its relationship with its sales network. As reported in Europe, HP is planning to bypass resellers and is test-marketing an approach that will let it go directly to its largest 120 customers in Holland. This bold, and potentially highly profitable, move carries the risk that U.S. resellers may lose their commitment if they think HP might eventually cut them out of the loop.

HP also is moving forward aggressively in its network management business. The company’s recent acquisition of Mercury Interactive gives it a whole new customer base to mine. And Mercury’s application development management products nicely complement HP’s OpenView network management software.

And HP showed its shrewdness with the three-year, $300 million enterprise deal it recently signed with . With 2006 sales of $91.7 billion, HP is already bigger than Big Blue and this deal will provide a huge leverage in enterprise sales.

HP’s board-level problems are not over, and in the next few months we can expect to see various directors being held accountable for their misdeeds. Still, HP’s customers, OEMs and resellers seem convinced that the company has what it takes to satisfy enterprise needs — at least for now.

Undoubtedly HP’s board-level problems are nowhere near over, and in the next few months we can expect to see various directors being held accountable for their misdeeds. Despite that, it seems HP’s customers and OEMs are convinced that the company has what it takes to satisfy enterprise needs. As for resellers, they’re still on board, too — at least for now.

Gibbs is an independent consultant. He can be reached at backspin@gibbs.com.

IBM: THE STICKING POWER OF SERVICES

By James Kobielus,

is a perennial high-tech success story. Every generation or so, it finds itself at the forefront of the next industry evolution. Fifty years ago, IBM established itself as the dominant vendor of mainframe computing. A quarter-century ago, it pioneered the personal computing age. During the last decade, it has become the world’s largest provider of IT professional services, which are the critical glue in a network environment that is moving toward open standards, open source software, software-as-a-service and .

IBM has former CEO Lou Gerstner to credit for this latest strategic thrust. He established the IBM Global Services unit in the 1990s, bringing together the firm’s consulting, systems integration and managed services offerings across diverse industries in virtually every country worldwide. Since 2002 (when Gerstner left), IBM Global Services’ share of the company’s total revenue has grown from 40% to more than 54%.

IBM’s robust professional services business gives it a plausible exit strategy from the hardware and software markets that were the drivers of its earlier success but increasingly have become commoditized. IBM continues to draw impressive margins from its SOA-focused application infrastructure, middleware, data management and tools businesses, but it’s only a matter of time before it finds itself competing in all niches with enterprise-grade open source products.

One of the trickiest challenges IBM faces is determining when to divest itself of its myriad enterprise software offerings, which are facing sustained price pressure from open source alternatives. As an avid participant in many open source initiatives, IBM is fully aware it is laying the groundwork for the eventual demise of its original cash cows. By releasing an open source community version of its WebSphere Application Server, IBM essentially is competing with itself, potentially drying up the license revenue that has been its mainstay in this and other enterprise software categories.

Interestingly, IBM’s professional services unit may be its ace in the hole in this open source era. Recently Oracle made a big splash by announcing plans to license, brand, distribute and support Linux at half of what Red Hat charges its customers, essentially robbing Red Hat of its oxygen supply. If IBM chooses to play Oracle-style hardball, it could leverage its massive service force to become the world’s dominant supplier of maintenance support and integration services for third-party open source environments.

IBM Global Services has no shortage of competitors. Rival enterprise software powerhouses — including Oracle, Microsoft and SAP — will build up their professional services forces through strategic acquisitions. Rival professional services firms — such as Accenture, BearingPoint and Deloitte — will become more formidable brands in the IT services wars. And every open source software vendor will defend to the bitter end its services revenue stream.

In this new network industry order, IBM ultimately will prevail because of its tremendous size, geographic distribution, diversified domain expertise and long-standing customer relationships. Year in and year out, it remains the bluest of the blue-chip vendors in network computing.

Kobielus is a principal analyst with Current Analysis and writes Network World’s Above the Cloud opinion column. He can be reached at jkobielus@currentanalysis.com.

INTEL: WELCOME TO PLANET PARANOID

By Howard Anderson,

Here’s a virtual conversation with you and Intel CEO Paul Otellini.

You: Good morning, Paul. Please pick which paranoia you would like to talk about today. Advanced Micro Devices? Qualcomm? Texas Instruments? China Inc.? Low-price challengers? Saturation?

Otellini: All of them.

You: That is the right answer! And the great thing is that they are all interrelated! For 20 years, from the introduction of the IBM PC in 1981, to 2001, you could count on the fact that every advance in your microprocessors would be gobbled up by your sometimes best friend, Bill Gates. “What Andy gives, Bill takes” — but by 2001, that started to change. Your strategy of obsoleting yourself and making customers lust for the new-new computer wasn’t working anymore.

Otellini: Tell me something I don’t know. But don’t worry, I have a few power ploys in the works.

You: Let’s talk about those in regard to AMD. You used to license your technology to AMD, mostly to show the Department of Justice that competition existed. But now AMD doesn’t know its place. It is real, muscular competition. Not only that, it has aligned with the One Laptop Per Child people to provide $100 computers to the Third World, so you potentially are giving it a disruptive weapon.

Otellini: Yep. So I am telling the Chinese that I will sell them $300 laptops and let them pay for them on the installment plan. I have told the Nigerians that I will give them $12 million for teacher training — and won’t ask too many questions. Anything to keep AMD from getting the volume it needs to cut my margin further.

You: Speaking of the Chinese, one of your major initiatives is into Flash. Twenty years ago you got out of the static random-access memory and dynamic random-access memory markets because they had become commodities and the Japanese were flooding the market. Don’t you worry that the Chinese will do to this market in 2010 what the Japanese did in 1980?

Otellini: It’s No. 4 on my worry chart. But I am paying attention to the Third World. I am building special computers for the Chinese Internet cafe business and doing a ton of R&D in China and India.

You: You obviously have that covered, and I am certain you don’t ever have to worry about China again. Or India. Let’s talk about , your hottest market. It accounts for 25% of your sales and has been growing at 65% per year — while your enterprise market is relatively flat. Clearly you aren’t going to dominate the market the way you did PCs, so you need a new growth engine. You have put your processors, chipsets and wireless networks in a combination to address this. But hasn’t Qualcomm, one-fifth your size, stolen the high ground and built a licensing model that is the envy of the world?

Otellini: I know that cocaine dealers study Qualcomm to see what truly obscene profits and products are like. If we had been able to do that with PCs we never would have given the high ground to .

You: Speaking of Microsoft, you have paid lip service to open source, but you seem to do as little as possible, as loudly as possible.

Otellini: You noticed? Open source is an evil, commie plot — no, strike that. We believe in open source.

You: Sure you do. What’s going on in the home?

Otellini: We love the home. We see Intel managing every home and its various and multitudinous devices, letting consumers download, manage and share digital content.

You: But Hollywood, the music industry, the broadcast industry and the networks are lined up against you – they view you as contentious and as part of the Evil Empire.

Otellini: Great, that’s what we really need. A new set of enemies.

You: Have a paranoid day!

Otellini: I always do.

Anderson, founder of Yankee Group and co-founder of Battery Ventures, is the William Porter Distinguished Professor at MIT. He can be reached at handerson@mit.edu.

MICROSOFT: THE OLD AND THE RESTLESS

By Mark Gibbs,

Particularly surprising were the terms. The two companies said they will release each other from any potential liability for the use of each other’s patented intellectual property. Novell will pay Microsoft $40 million to indemnify SUSE users from being sued over possible patent violations, and Microsoft will pay Novell some $440 million for coupons that entitle SUSE Linux users to a year’s worth of maintenance (exactly what Microsoft will do with these is anyone’s guess).

Many observers see the deal as a bad move on Novell’s part, including open source advocates, such as Bruce Perens, who even suggests Novell is the new SCO Group.

Novell may not be behaving exactly as SCO did, but the deal definitely will have some similar and equally undesirable consequences. For example, it appears to make Novell violate the GNU General Public License and so will create yet another expensive and distracting legal furor in the open source world. You have to wonder whether Novell’s new best friend intended this all along.

I would take bets that we’ll look back in a few years and see clearly that, for what amounts to a rounding error in its coffee fund, Microsoft killed off one of its oldest rivals and once again dragged its nemesis, the open source movement, off track. Hopefully we’ll see also that open source merely was slowed at worst.

What of Microsoft’s perceived threat from Google? Gates’ recent statement that “this competition is a fun one for both companies” has to be one of the more disingenuous ideas he’s tried out on the press in some time. Microsoft really takes the Google threat very seriously.

Too bad this is another front Microsoft has come to too late. While it may be able to increase its market share, the impact on the big players, such as Google, IBM, Autonomy, Fast and Endeca, will be minimal at best. Microsoft will remain an also-ran, albeit an important one, in the enterprise search market.

After releasing Windows Vista and Office 2007, Microsoft’s big push will be on expanding and enhancing the heady mix of desktop and Internet service-based software that will constitute Windows Live — what Gates referred to as “taking it to the next level.”

But what that means for enterprise users is unclear because Windows Live is such an odd collection of mostly beta-release e-mail services, domain hosting, simple hosted applications and games. Even so, Gates’ commitment to focus on Live implies that its goal is more ambitious. Windows Live definitely is something to be watched over the coming year.

However, Microsoft likely will gain significant leverage in the enterprise market through the three-year, $300 million deal it recently inked with HP. Microsoft will use the relationship to build its position as an enterprise application vendor, which will in turn reinforce its operating systems sales.

The bottom line is, as always, that the impact and importance of Microsoft in the computer and network marketplaces can’t be underestimated. The company’s challenge for the coming year and beyond will be to expand in such business areas as search and Web services, where there already is some very stiff competition from Google and a whole army of software-as-a-service providers.

Microsoft is going to make 2007 an interesting year for the entire computing world and an easy one for us columnists because there’ll definitely be lots to write about.

Gibbs is an independent consultant. He can be reached at backspin@gibbs.com.

ORACLE: IDENTIFYING A LEADER

By Dave Kearns, Identity Management

That has landed again among the most powerful companies in the network industry is no surprise. The surprise — the very good surprise — is that it continues to come out on top for many different reasons and in numerous categories. There’s no question it’s the company that comes to mind when one thinks about database systems. The 2005 acquisitions of PeopleSoft and Siebel Systems put it in the forefront of “person management,” from both the human and customer relations standpoint. But what grabs me is Oracle’s spectacular rise in identity management.

Although Oracle for a dozen years has offered a directory service as part of its applications, CEO Larry Ellison didn’t venture to talk about identity management until late in 2001. That’s when he offered to provide the tools needed for a national . Privacy advocates and other experts immediately hooted down his idea, and the Renegade from Redwood Shores said no more. But evidently Ellison was studying the identity management landscape quietly. In mid-2004 Oracle acquired Phaos Technology and (some feel more importantly) that company’s seat on the Liberty Alliance board. Ellison announced: “Through its membership in the Liberty Alliance, Oracle plans to leverage its expertise in and identity management to help further the organization’s success and development.”

That’s right, Oracle was willing to take its (limited) expertise in identity management and its (nonexistent) expertise in security and show those Liberty Alliance people how to do federated identity! Many feel that Ellison’s middle name is “chutzpah.” They may be right, but that doesn’t mean Ellison was wrong.

Oracle didn’t stop with Phaos. In 2005, Oracle acquired Oblix, OctetString and Thor Technologies, all major players in various facets of identity management. Of course, acquiring companies and actually integrating them into your product mix are two different things.

But Ellison recognizes talent. More important, he has a knack for getting very talented people to work together, and that’s what he did with the best and brightest of the folks from the companies that Oracle acquired. He did it so well, in fact, that a bit over a year later, Gartner named Oracle one of the three leaders in its Magic Quadrant report on identity and access management (IAM), saying, “Oracle bought into the IAM market with acquisitions of Phaos (May 2004), Oblix (March 2005), Thor Technologies (December 2005) and OctetString (December 2005).

In a short time, it has amassed a very strong management team and IAM technology portfolio. Adding its January 2005 PeopleSoft acquisition for HR management, Oracle is positioning itself to be the ‘mover and shaker’ in the IAM market. To date, Oracle is fulfilling on its strategy in delivering an integrated product suite. Its IAM road map looks the best of all vendors.”

The other two leaders? /Tivoli and . Oracle has driven to the top in identity management faster than either of those companies. It is used to competing with IBM in the database sector. But both IBM and Sun (via their hardware divisions) are erstwhile Oracle partners. All three have well-developed road maps for IAM. All three will be competing at the top for a number of years to come. Significantly, no other challengers offer the full range of IAM products and no other challengers stand within sight of the power of the Big Three. And of the three, only one has a charismatic, get-it-done-now leader. As recently found out, it’s very hard to stop Larry Ellison.

Kearns, an independent consultant, can be reached at dkearns@vquill.com.

SYMANTEC: SUPERSTAR FOR INFORMATION STEWARDSHIP

By Johna Till Johnson,

IT executives can be forgiven for wondering a bit about the selection of Symantec as an enterprise power vendor. We’re talking about a company that makes consumer antimalware and Windows backup systems — hardly the stuff that lights the eyes of enterprise-technology visionaries. Moreover, desktop antimalware, storage and backup don’t seem, at first blush, to have much to do with each other, so where’s the value in combining both in one company?

But here’s the deal. quietly and efficiently has been pulling together many key pieces of an overarching strategy around the emerging discipline of information stewardship, something that’s front and center on the minds of virtually every enterprise I’ve spoken with. Nearly 90% of them say implementing an effective information stewardship strategy is vital.

Information stewardship is the discipline of managing enterprise data in the face of ongoing needs for compliance, security, privacy, accuracy and availability. It comprises five key subdisciplines, each having to do with an aspect of effective information management:

* Information protection (ensuring that data is kept adequately private and secure).

* Data-quality management (ensuring that data is accurate and complete).

* Information life-cycle management (mapping the storage infrastructure to the data type, according to the ongoing business value of the information at hand and the compliance policies that govern it).

* Business continuance (ensuring that data is appropriately available in the event of a failure).

* Compliance (validating that data is managed, archived and logged to conform with applicable government regulations).

Critical technologies in developing an information stewardship architecture include storage, — particularly the emerging area of continuous data protection (CDP), which comprises data-quality management tools and security and information protection technologies. Of the latter, messaging security, threat management and antimalware protection are particularly important. You can’t get best-of-breed solutions in all these areas from a single vendor.

Starting to see the picture? From its historic strength in information protection (antimalware, threat management) Symantec has expanded to cover nearly all the bases of information stewardship, with acquisitions in business continuity and information life-cycle management (Veritas Software, 2005) and compliance and messaging security (IM Logic, January 2006).

And the trend continues: Symantec recently picked up Revivio, one of the earliest CDP start-ups, joining EMC (which acquired CDP player Kashya in May), (which acquired CDP start-up XOsoft in June) and (which picked up CDP start-up Topio in November).

Overall, Symantec’s strategy is clear: Through a methodical combination of grass-roots growth and acquisition, the company is putting together the pieces that will make it a leading player in the emerging discipline of information stewardship.

So, what’s missing? Besides gaining strength in data-quality management, Symantec is doing everything but telling the world about its strategy. That may be a competitor’s attempt to stay under the radar of larger players (particularly EMC and IBM), but it could be a mistake. Enterprise IT executives need to hear the story. Once that happens, Symantec can count on lighting up the eyes of technology visionaries everywhere.

Till Johnson, president of Nemertes Research, can be reached at johna@nemertes.com.

VERIZON: FUTURE-PROOFED

By Daniel Briere,

hasn’t had the easiest time justifying its massive investments in fiber (both to the home and to the business), but that’s a problem only for folks who spend their time looking at earnings and share prices (which are up this year) and the relative capital spending strategies of carriers.

For those of us in the IT business, however, Verizon has been the leader among large U.S.-based carriers investing in a future-proofed network. When you consider its FiOS fiber-to-the-home efforts, its moves into IPTV for consumers, its aggressive rollouts of Evolution Data Optimized () technology on the side, and its bandwidth-boosting Enterprise Advance initiative, you find Verizon on the cutting edge across the board.

Simply put, Verizon has made itself the U.S. carrier best positioned to meet the future needs of customers, be they Fortune 50 enterprises, distributed enterprises relying on wireless and DSL/FiOS, or even one-person home businesses. And in the face of unrelenting Wall Street pressure, it’s stuck to its guns and continued to roll out its networks at a rapid pace.

On top of these core infrastructure moves, Verizon has been leading the way on the applications and services side. When Verizon made the list of the most powerful companies in networking last year, its moves into managed services, such as outsourced security and storage offerings, got the nod. Verizon has leveraged the MCI side of the house to expand these offerings this year, adding such notable new services as telecom expense and wireless device , and leading the market in and converged .

Everything’s not perfect of course. Like any large acquisition, MCI has been hard to swallow at times — we’ve heard of some losses of key MCI folks and some customer losses as well. And its billing-system integration hasn’t been an easy task. But Verizon has some luck here, because big enterprise customers don’t have a lot of other choices: Sprint Nextel doesn’t have the wireline angle that Verizon has, and although AT&T matches up pretty evenly, it too is in the middle of dealing with its own major acquisition (acquisitions!). The lack of competition helps Verizon here.

Perhaps the biggest downside from the IT perspective has developed from this lack of options. Verizon hasn’t been the best at responding to customer desires for openness. We can see this clearly on the wireless side, with features disabled on phones (leading to disgruntled customers and class-action lawsuits) and terms of service (for example, on EV-DO data plans) that lock customers in and keep them from doing what they want to do.

There’s a glimmer of hope, however. We see Verizon beginning to back away from these draconian restrictions and starting to let customers use devices in more flexible ways (for example, allowing phone-as-modem plans for EV-DO smart phones).

So who’s trying to usurp Verizon’s place on next year’s power-players list? Well, of course AT&T goes up against Verizon head-to-head in most spaces, and has the scale and scope to compete (particularly if the BellSouth merger goes ahead). And look for new enemies as the cable multisystem operators and Sprint team up to bring consumer, wireless and a surprisingly strong bundle of enterprise services to market next year.

Briere, CEO of TeleChoice, can be reached at dbriere@telechoice.com.

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