* IBM wins $160 million deal to manage Boeing's voice net
When experts evaluate the outsourcing opportunity these days, they seldom include voice network management as one of the hot markets. But late last month, IBM signed a deal with Boeing that might renew interest in the very old market for voice management services.
IBM signed a three-year, $160 million contract – with extension options – to manage the Boeing corporate-wide voice communications network, which supports some 150,000 users. IBM previously has provided outsourcing services to Boeing in support of IT and satellite communications systems, but this will be the companies’ first major contract for voice network management services.
Boeing hopes to improve operational efficiency and cost management by outsourcing its voice network, according to officials associated with the deal. Under the contract, IBM will institute variable pricing for a broad spectrum of services, such as telephony systems and applications support, voicemail, audio conferencing and operator services. IBM has already instituted variable pricing structures – which it calls “on demand services” for some of its data services customers.
IBM, working with Verizon, will also implement a comprehensive voice management system to improve reliability and decrease costs for voice service to Boeing users throughout the U.S.
While the size of the IBM-Boeing contract is turning heads, IBM is far from the only outsourcing company gaining customers in the voice management services market. Large providers such as Nortel and Cisco have added a number of new voice management service customers in recent months, while managed service providers such as Savvis Communications have unveiled new voice management services in recent weeks.
Voice network management services certainly are nothing new – in fact, they have been available for decades. So why the sudden uptake? Not surprisingly, the key drivers are economic.
First, there is the need to save money. A package of variably-priced services – integrated and provisioned by a single vendor – enables the enterprise to lower the administrative costs of integrating multiple providers’ voice services while also paying only for the services it uses. While outsourcing providers such as IBM and Nortel are delivering this “utility communications” service model for voice, VPN offerings such as Virtela’s also help to lower voice costs by integrating them with the IP network.
Second, there is the need to gain cost predictability. Internally-managed voice networks may serve the enterprise well, but their costs may surge during peak traffic periods or when network problems occur. Outsourced voice networks can generally be managed so that these cost “spikes” are averaged out over the year, eliminating unexpected costs.
Third, there is the need to conserve staff resources. Even more than the data network, a voice network requires 24-7 service, including immediate failover and repair in the case of an outage. Even in today’s IT-dominated business environment, a phone outage is still more likely to cause the loss of customers than a computer system failure. Yet to maintain full availability, a voice network requires constant attention and heavy redundancy – two things that may be more efficiently delivered by an outsourcing provider than by precious internal staff.
Will the IBM-Boeing deal spark a mass movement to outsourced voice network management services? Probably not. But it may cause many large enterprises to re-evaluate the costs associated with integrating and managing their voice networks. And in some cases, enterprises will likely find that the costs and resources associated with managing voice networks outweigh the benefits of managing those networks internally. And in those cases, outsourcing may soon become a very real alternative.
