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Monday, June 30, 2008

Businesses Adopting SP Managed Services

According to the Synergy Research Group, in the first quarter of 2008 worldwide total managed WAN CPE and network-based services sales posted a 4.9 percent increase of $1.4 billion and are projected to continuing growing throughout the year.

The growth in the managed services market is fueled by businesses worldwide turning to service providers for managed metro Ethernet, IP VPNs, managed IP voice and IP security requirements.

Enterprises are revamping their business models to increase their revenue, recognizing that their IT and networks are a critical component of their business profits. Additionally, they recognize that outsourcing their network management to service providers is one way to improve their business success and bottom line.

Companies such as Cisco, Juniper and Alcatel-Lucent are working to educate service providers about the huge market in managed services and of the importance of providing end-to-end services for these businesses.

Ray Mota, Chief Research Officer at Synergy Research Group said, "To stay competitive, optimization of business and financial models is the key. Enterprises recognize that they need comprehensive IT network services from service providers that can support their businesses with not only bandwidth but with end-to-end managed services."

Service providers, in turn, are investing in cutting-edge technology and equipment and expanding their services to match their customer's requirements with fully customized, cost effective solutions.

According to Synergy's assessment, Cisco leads the managed services market segment, dominating 67.3 percent of the overall market opportunity.

Al Safarikas, Senior Director, SP Marketing at Cisco added "Certainly, as we look to the growing managed service market, a unique opportunity exists for xSPs to extend their leadership and benefit from the technology and managed services enablement offered by Cisco."