The value of IP services

The services aspect of IP convergence has serious implications for carriers' revenue structure. It offers them a unique opportunity to develop much needed, new revenue streams in their business services portfolio. A unified NGN infrastructure creates end-to-end network transparency from the desktop to the application server and opens the door for application-specific service delivery, where the carrier takes the responsibility for the end-to-end performance of the networked application. The application-specific SLAs are not network centric measurements such as CPE-to-CPE latency but application response centric measurements, such as node processing and node sending latency.
The carriers' ability to monitor and manage this end-to-end IP connection across their NGN fabric coincides with the corporate reorganization of their IT networks department away from internal service provider to becoming a service broker assisting lines of business negotiated service delivery deals with external service providers and taking on the responsibility of monitoring SLA compliance.
The fly in the ointment for the carriers is that they face stiff competition from the outsourcers like EDS and CSC and system integrators like IBM GS and HP, which now have a much clearer network component in an all-IP network and thus can focus on data center management skills. This potentially pushes the carriers back to delivering the bit pipe and missing out on the value-added, higher layer services.
So the stakes are high as carriers move customers from legacy (and lucrative) frame relay and ATM networks onto (cheaper) QoS based MPLS services, because the four to six QoS layers are only crude approximations to the optimized application profiles that an end-to-end service provider can deliver.
An application SLA is the culmination of existing management capabilities and recent developments that simulate apps performance from client to server. The service provider (carrier/outsourcer/SI) must be able to map out the business requirements of an IT solution, undertake network performance optimization and provide predictive network modeling assessing the impact of change in network access and utilization, and recommend solutions to address such changes.
Finally, the service provider must provide proactive apps performance analysis 24 x 7 providing early warning of performance degradation and potential problems with the underlying infrastructure - both LAN and WAN. This is a tall order for any single service provider and the biggest corporate apprehension factor is simply: trust. Can a carrier actually manage and run a business critical application as well as the corporate data center‾ Can it provide the associated services such as customer services and security‾ And, if something goes wrong what back-up resources will the enterprise need to keep on standby alert‾
Talking to the enterprise users, carriers may not have much choice in the matter. A recent survey of EVUA members indicated that over half the respondents expected to be deploying end-to-end IP services with application performance SLAs in the next two years. So carriers late to this market risk having outsourcers and system integrators eat their enterprise market.  
Carriers are sitting up and taking notice. Global as well as pan-European service providers are offering application specific SLA to their most important customers (Equant), offering to host corporate data centers and provide server-side SLAs (AT&T), refining their MPLS services to address specific business application profiles (BT Global Services) and enhancing their management and monitoring tools to provide application performance data (Verizon Business and T-Systems).
Given these fast paced developments enterprise, IT needs to review their telecom services delivery contracts, especially the associated SLAs, based on their preferred IT services delivery model. There is much to be gained in price/performance if the structural changes happening on the WAN market are vectored into their own organizational changes.

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