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Adding consulting to business mix

Feb 09, 20043 mins
Enterprise ApplicationsMergers and Acquisitions

In the past five months, Avaya and SBC have acquired network consulting firms to improve their network integration and management capabilities, support their network infrastructure upgrades, and better position themselves to compete for network outsourcing opportunities. These acquisitions suggest that, despite the promise of on-demand computing and turnkey managed services, network vendors and service providers still need hands-on network skills and resources to plan, build and operate today’s increasingly complex networks.

In September 2003, Avaya acquired Vista International Technology to enhance its network planning, design, implementation and management capabilities, especially for converged, multivendor networks and call centers. By acquiring Vista, Avaya added network consultants and engineers with Cisco, Microsoft and Nortel certifications.

SBC kicked off the new year by acquiring Callisma, a network professional services company whose staff includes Cisco-certified internetworking engineers; HP, Micromuse and System Management Arts experts; and VoIP, security and network storage specialists.

Make no mistake: Avaya and SBC are attempting to emulate IBM’s success in using its consulting capabilities to generate product sales, win market share and gain a distinct competitive advantage. Network vendors and service providers are striving to escape their sales doldrums, elude deadly price competition in their traditional product-driven markets and reposition themselves as full-service solution suppliers. IBM’s acquisition of PwC Consulting helped it make this same transition.

However, integrating a consulting business into a product-centric company or service provider is not easy. Lucent and Sprint failed to jump-start their network professional capabilities with acquisitions of International Network Services and Paranet, respectively, because they couldn’t assimilate the new engineers and consultants into their overall operations. In both cases, they eventually divested these consulting groups for a fraction of the original acquisition price.

Avaya, SBC and others that pursue this consulting acquisition strategy must avoid making the same mistakes. Competition for network consulting and outsourcing services is growing as AT&T, BellSouth, MCI, Qwest and Verizon expand their network professional service portfolios, and companies from abroad such as Alcatel, Equant and Siemens use their network consulting capabilities as part of their arsenal of global telecom outsourcing services.

If you’re an enterprise decision-maker, network consulting and professional services can help assure you that your network vendors and service providers can properly address your business and technical requirements. However, it’s important to examine not only the credentials of the consultants assigned to your projects, but also the structure and consistency of your vendor or service provider’s overall service delivery methods.

To succeed in the network consulting business, vendors and service providers must develop structured yet flexible approaches that address customers’ specific business needs and generate measurable results.