Build or Buy?

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Build or Buy?

  1. 1. This is an automated PDF presentation. Please choose your option: 1. If you wish to see this presentation now: just press any of your mouse buttons to begin. Then continue simply with the navigation arrows. 2. If you wish to print or see this presentation later: just press the escape button (ESC) on your keyboard Build or Buy? THE CISCO GUIDE TO MANAGED NETWORK SERVICES
  2. 2. > More integrated and extended IT resources > Improved IT economics > Increased productivity and responsiveness > Improved risk management and business continuity page 1 of 37 Managed Network Services The move to managed services accelerates Can your company benefit from these managed services advantages? IP VPNs IP Telephony and contact centres More effective decision making Security Mobility Data centre internet access applications and WAN data and hosting services Build or Buy? THE CISCO GUIDE TO MANAGED NETWORK SERVICES Introduction Managed Business Closer Choosing Services in case look a service action provider
  3. 3. > Managed IP VPNs > Managed security > Managed IP telephony > Managed hosting and data centre services > Managed wireless and mobile computing > Managed Web contact/call centres > Managed WAN data services page 2 of 37 The move to managed services accelerates The move to managed services accelerates Table of contents: Intro: The move to managed services accelerates The managed approach delivers stable, high performance network and IT resources – while enabling better cost models. Part I. Managed network services in action What managed network services are and how they work. Part II. The business case for managed network services An overview of 5 pressing business challenges that are uniquely addressed by managed network services. Part III. Closer look: Seven key managed service areas Part IV. Choosing a managed network service provider There is a provider for virtually every type of networking and IT requirement, for large and small companies alike. Build or Buy? THE CISCO GUIDE TO MANAGED NETWORK SERVICES Introduction Managed Business Closer Choosing Services in case look a service action provider
  4. 4. page 3 of 37 The move to managed services accelerates Today companies must cost- Many experts and leading end Gartner, Inc. Strategic Planning Assumption: effectively focus technology and user organisations now agree: By 2005, more than 50 percent of enterprises human resources on activities self-managed networks are in will source the operation and management of that lead to competitive decline – managed services will advantage and long term be a major growth area for years premises network infrastructure to external profitability. Consequently to come. One sign of this trend is service providers. business managers are moving the diversity of managed network non-core activities to external and IT services that are now service providers through being offered to large and small outsourcing of major network companies across EMEA. functions (IP telephony, WAN, Increasingly, the question is: build VPN, extranet, etc.) or it yourself? ...or, buy it from “out-tasking” of specific internal a provider? tasks (firewalls, hosting, wireless, remote access, storage, etc). This approach allows liberated internal resources to be reallocated to more strategic, revenue generating initiatives. Build or Buy? THE CISCO GUIDE TO MANAGED NETWORK SERVICES Introduction Managed Business Closer Choosing Services in case look a service action provider
  5. 5. page 4 of 37 The move to managed services accelerates Diagram 1.0 Which services to What managed services are: Managed network services are build and which The list of managed services that proving to be an optimum to buy is widely available today from solution for EMEA companies EMEA service providers includes: that cannot maintain the internal managed virtual private networks human resources, capital (IP VPNs); managed business investments or management Core Activities Non-Core Activities telephony over IP; managed data focus that is necessary to stay on security services; managed top of fast moving network Applications hosting and servers; managed technologies and network- Specialised ERP and Email, e-commerce, hosting storage and backup; managed dependent applications. Service Line of Business software archiving, disaster recovery wide and local area network providers generally have larger network security, etc. services; managed wireless and and more experienced staff mobile applications; managed and more robust, reliable content caching/distribution; infrastructures. Managed service and a range of network-based business productivity applications customers are freed from routine, low-level operational tasks so BUILD BUY that are hosted in provider data they can develop new ways of centres (Microsoft Exchange applying technology to yield a Custom manufacturing WAN/LAN, IP VPN, wireless, Server, sales force automation positive return on investment. and production systems storage, IP telephony, video conferencing, etc. tools, unified messaging, etc). Infrastructure Build or Buy? THE CISCO GUIDE TO MANAGED NETWORK SERVICES Introduction Managed Business Closer Choosing Services in case look a service action provider
  6. 6. page 5 of 37 Managed services in action Managed services can be used as a They are now an effective, proven short term tactical tool for reducing approach for companies that want costs and increasing functionality to move to an all-IP enterprise (e.g., outtasking) – which keeps network with converged data, voice existing business processes intact. and video communications. Or, managed services can be used strategically as part of a major plan Rob Lloyd, President of Cisco to integrate, reengineer or extend operations in EMEA, explains the core business processes. This is the importance of this trend: “It’s not case when companies use the always easy for businesses to take managed approach as part of a advantage of powerful new large IT infrastructure project such technologies. So, many companies as a strategic e-business in EMEA are turning to managed application, Enterprise Application services from telecom providers to Integration (EAI), Real Time help close the technology gap.” Mr. Enterprise (RTE) extended supply Lloyd goes on to say that managed chains or company-wide services have special significance collaborative multimedia workflows. for European companies, “In Managed services are also Europe, managed services are emerging as an important strategy somewhat ahead of other regions, for companies that must simplify with a number of service providers and streamline the overly complex and large telcos offering a wide and non-standardised IT variety of packages. This range of architectures that result when choice gives European internal departments and business organisations a tremendous degree units have greatly different IT goals, of flexibility in how they capture budgets and technology biases. and harness new technologies Managed services have come a long way in the past five years. designed to drive productivity.” Build or Buy? THE CISCO GUIDE TO MANAGED NETWORK SERVICES Introduction Managed Business Closer Choosing Services in case look a service action provider
  7. 7. page 6 of 37 Managed services in action Diagram 2.0 A managed How to start have valuable insights into service for every For companies that are new to network technologies, data centre IT challenge managed services, a good first step operations, e-business methods is to start by isolating a specific and vertical applications, which “pain point” ...for instance, poor large and small companies can email service or overloaded data benefit from all the way up to the Managed Web and storage or inadequate remote director level. Managed business network access. With a specific Managed Mobility applications Services problem in mind, an RFI (request With the combined knowledge Voice/IP Managed Telephony for information) is used to obtain and aptitudes of the provider VPN Managed information about costs and and customer, its possible for Security services from one or more service the managed services agreement providers. Providers will in some to stipulate a number of key cases offer a free analysis of a best practices and architectural Managed Value-Added Services customer’s existing network improvements that will greatly resources, applications, business benefit end users and Managed Data Access / Connectivity Services goals and cost structures. Providers applications. Network Connectivity WAN / LAN / Wireless can use TCO (total cost of ownership) comparisons to show Once a managed services contract the economic differences between is in place, the provider takes full the self-managed vs provider- operational responsibility for Reasons For Out-Tasking Networking Products managed approaches. delivering a network or IT service, Not a Core Business Activity 54% while the customer maintains Cost Savings 51% The consultative approach control of its business processes Lack of in-house Expertise 51% Today’s managed network service and strategic direction. Typically Lack of Staff 45% providers are similar to high-end the customer will dedicate one of To gain More Value 37% integrators that possess a large more employee to liaise with the amount of hands-on IT knowledge. Today’s providers service provider. Build or Buy? Percent of CIOs 0 10 20 30 40 50 60 THE CISCO GUIDE TO MANAGED NETWORK SERVICES Introduction Managed Business Closer Choosing Services in case look a service action provider
  8. 8. Voice/IP Managed Telephony Managed VPN Security Managed Value-Added Services page 7 of 37 The move to managed services accelerates Managed Data Access / Connectivity Services Diagram 2.1Connectivity WAN / LAN / Wireless Network Reasons for out-tasking Business relationship scenarios Performance and reliability levels networking products In some cases, the provider will are guaranteed by stringent Reasons For Out-Tasking Networking Products take ownership of the customer service level agreements (SLA) Not a Core Business Activity 54% network/IT equipment through that include penalties and Cost Savings 51% a formal transfer of assets. In possibly monetary or “credit” other cases, the customer retains compensation for non- Lack of in-house Expertise 51% ownership of capital equipment compliance. To achieve a service Lack of Staff 45% that the provider manages level comparable to what the To gain More Value 37% (see Diagram 2.2). In larger provider can offer, most Percent of CIOs 0 10 20 30 40 50 60 projects, it’s not unusual for a companies would have to greatly Source: Cisco primary research 2003 provider to hire a portion of the increase their in-house staffing customer’s in-house technical levels and IT budget allocations. employees as part of the Managed service financial Diagram 2.2 managed services relationship. models are flexible and varied Sphere of service Those staff members may work but generally, the customer pays provider action in the provider’s network facilities a monthly payment or fixed fee or on the customer site. that makes budgeting and Network Service demarcation for planning much more efficient Access managed service where provider maintains CPE* Device Managed service providers are and predictable than is generally Service Provider contractually responsible for the case with build-it-yourself Network such tasks as network design, networks and applications. installation, monitoring, fault isolation, repair, upgrades, Service demarcation for managed service where maintenance, helpdesk, and Customer LAN provider maintains CPE related duties. * Customer premise equipment Build or Buy? THE CISCO GUIDE TO MANAGED NETWORK SERVICES Introduction Managed Business Closer Choosing Services in case look a service action provider
  9. 9. > More integrated and extended > Improved IT economics page 8 of 37 The business case for managed > Increased productivity and network services > Improved risk management In the current economic climate The next section looks at how If companies are to successfully companies must somehow managed services generally integrate internal workgroups, decrease costs and risk exposure address these 5 business and departments and business units, > More effective decision while at the same time achieving financial concerns. while at the same time moving better IT services. A stable, towards voice, data and video secure, high performance network More integrated and extended convergence, the correct solution is essential for company IT resources is a unified IP-based network. profitability and competitive The goal of integration is the A company-wide IP infrastructure success – but budget allocations coveted “fusing” of backoffice, can integrate diverse front- and for large capital IT investments front office and supply/demand backoffice applications that have are often not possible. With chain applications into a been traditionally supported by managed services, companies can business-process oriented multiple parallel frame relay, shift much of the financial burden architecture that cuts across ATM and private line circuits. The and risk of network and IT traditional departmental and move to an all-IP infrastructure expansion to the provider while automation boundaries. In this should take place rapidly but achieving: model, when a customer wants to without disruption of users or place an order via an e-commerce line-of-business applications. Website, the back-office inventory IT resources and fulfilment systems respond with product availability and shipping information in real time. Integration is a complex responsiveness technology challenge but it can deliver massive benefits in terms of lower total cost of ownership, and business continuity more streamlined network operations, faster application making integration and higher network perfomance. Build or Buy? THE CISCO GUIDE TO MANAGED NETWORK SERVICES Introduction Managed Business Closer Choosing Services in case look a service action provider
  10. 10. page 9 of 37 The business case for managed network services value-added services that are offered by ISPs, e-commerce More integrated and extended as data traffic. This means that vendors, new media houses IT resources (continued) companies can converge all and service organisations Given enough time and money, independent data networks along throughout EMEA and build-it-yourself enterprise with voice data and video on to a internationally. Managed network integration is indeed possible, high performance provider connectivity and managed data but more and more companies backbone. Many providers centre resources can be used are finding that managed services compliment converged network to facilitate good business allow them to take immediate infrastructure with a converged practices, including business advantage of the mature, scalable portfolio of managed data centre process outsourcing (BPO), IP connectivity that already exists applications that achieve large e-marketplaces, extended supply in service provider backbone economies of scale by sharing a chains, and “data-centre to data- networks. If a company wishes to common set of well managed centre” interactions with key integrate existing circuit networks network, IT and human resources. trading partners and collaborators. and isolated automation “islands,” in-house technical teams must Reaching out with managed master advanced MPLS services Gartner, Inc. Strategic Planning Assumption: (multiprotocol label switching), The use of the service provider’s By 2005, more than a quarter of IT capital QoS (quality of service) routing, advanced network, data centre and budgets in at least 70 percent of large and BGP (border gateway protocol), knowledge resources can help dense wave optical switching and companies create a “borderless” midsize enterprises will be directed to other daunting technologies. enterprise that shares business transforming the enterprise using external processes and workflows with focus and agility. IT leaders should champion Providers have been building trading partners and customers opportunities for IT-enabled business partnership converged IP networks with great across the network. strategies and align competencies and intensity for several years now. By architecture capabilities with them. prioritising traffic flows into When company sites are [InSide Gartner This Week Vol. 20, No. 17 January 2004] different classes of service, connected to the provider’s provider networks can handle voice and video over IP on the network robust infrastructure, they can access a rich array of IP-based Build or Buy? THE CISCO GUIDE TO MANAGED NETWORK SERVICES Introduction Managed Business Closer Choosing Services in case look a service action provider
  11. 11. page 10 of 37 The business case for managed network services Improved IT economics The picture is very different with For decades, IT and network managed services, which allow implementations have required major savings and the major investments and large opportunity to move from amounts of fixed costs that are unwieldy capital expenditure sunk into equipment that rapidly burdens to controlled, concisely becomes obsolete. When defined operating expenses. companies build network and IT Managed services are essentially infrastructure with in-house pay as you go, with set fees that resources they must deal with are stable for the life of the complex issues relating to contract. In some cases, providers capitalisation, depreciation, IT offer on-demand or utility portfolio asset management and models, so customers pay only the financing of implementation for services and bandwidth they (labour) expenses that can greatly actually consume. Some exceed the costs of hardware and managed services can be paid for software products. In many cases by the seat or by the transaction, financial planning is hampered by or some other “unit” of use: a large number of unknowns and megabits of throughput or inexact estimates regarding the gigabytes of storage, for instance. scale and duration of IT In general, managed services let improvements. companies move from rigid costs and debt service burdens to flexible “virtual asset” models, greatly reducing financial complexity and uncertainty in the IT planning process. Build or Buy? THE CISCO GUIDE TO MANAGED NETWORK SERVICES Introduction Managed Business Closer Choosing Services in case look a service action provider
  12. 12. > Accrued an average of > An average 85 percent > Increased customer > Improved change > Predictable performance and page 11 of 37 The business case for managed network services Diagram 3.0 Typical recurring €225,000 worth of benefits Improved IT economics cost reductions (continued) with managed When Gartner conducted in-depth per year from improved services interviews with 10 midsized and availability large enterprises, they found cost savings in the range of thousands Service Fees 49% to millions of Euros. Gartner reduction in critical faults, found that managed network and 65 per cent reductions in IT Costs 21% service customers: total faults Hardware 20% Transport 10% satisfaction management effectiveness and efficiency support costs Build or Buy? THE CISCO GUIDE TO MANAGED NETWORK SERVICES Introduction Managed Business Closer Choosing Services in case look a service action provider
  13. 13. page 12 of 37 The business case for managed network services A closer look at cost reductions Reduction in IT and hardware costs Managed services can create from managed services are possible because of a shift of significant savings because they Based on numerous case studies major IT staffing and equipment leverage the powerful economies by Cisco Systems, it’s been outlays to the provider, who can of scale that many network service determined that companies make more efficient use of providers enjoy. Providers buy the typically realise cost advantages resources by load balancing them most robust and up to date from managed services in four across numerous managed technologies, they have shorter primary areas: service fees, IT services customers. Reduction in replacement cycles, and they can costs, hardware costs and transport network transport costs occur distribute the cost of core costs (see Diagram 3.0). For because internal staffs are no infrastructure equipment, software instance, when a conventional PBX longer responsible for time and other resources across multiple is replaced with a managed IP consuming routine monitoring, customers. By hiring the most telephony system, the customer is maintenance, and upkeep of qualified and experienced network no longer “locked into” large network connectivity throughout and IT engineers, providers create periodic management fees that are the enterprise. Also, consolidated an internal knowledge pool that the normally paid to the PBX vendor. and provider-managed network typical end user company cannot There is also typically a substantial access links can reduce the large cost justify. reduction of costs for PBX moves, monthly telecommunications adds and changes because these charges that are associated with routine tasks are accomplished at a multiple parallel frame, ATM or fraction of the cost in the IP leased line circuits. environment. Managed services can also reduce service fees in other areas, for instance in the area of specialised data centre equipment maintenance and management fees. Build or Buy? THE CISCO GUIDE TO MANAGED NETWORK SERVICES Introduction Managed Business Closer Choosing Services in case look a service action provider
  14. 14. > Reducing large capital > Reducing maintenance and > Reducing internal IT staff and > Reducing lost revenues due to > Leveraging provider’s > Providing predictable costs for responsive to dynamic page 13 of 37 The business case for managed network services In general, managed services also realise strong economic enable a much more economical, benefits from managed services – streamlined and predictable IT managed services are less financial model by: expensive than building a sophisticated in-house IT and networking capability. In contrast, investments companies that have already built in-house expertise, best practices, operations costs state of the art data centres and VPNs will not see the same benefits. service head count Increased productivity and responsiveness downtime Companies are today under tremendous pressure to speed up their business processes economies of scale so they can become more technology customer requirements and market changes. The goal is Although they are well a “real time” enterprise (RTE) that documented, the cost advantages of removes internal operational and managed services will vary from decision making delays so the company to company. Companies company can respond immediately with distributed operations to external events. But when a involving a number of remote sites company’s network, servers, email and users will benefit considerably systems, business applications and from managed network services. Companies without a great deal of security software performs poorly, overall responsiveness decreases internal IT or network expertise can and business processes degrade. Build or Buy? THE CISCO GUIDE TO MANAGED NETWORK SERVICES Introduction Managed Business Closer Choosing Services in case look a service action provider
  15. 15. page 14 of 37 The business case for managed network services Diagram 3.1 Comparison Increased productivity and With build-it-yourself networks, of network responsiveness (continued) the more limited capacity of performance Unlike many existing company- network resources can be consistency built IT architectures, the service exceeded during peak traffic provider’s robust wide area spikes (see Diagram 3.1). In network and secure data centres contrast, the large capacity and are maintained with consistently highly redundant topology of the high standards of performance provider’s backbone network can and reliability. Service provider absorb unpredictable customer Scalable provider capacity project teams use the latest in demands and peak seasonal project-, asset- and change- traffic levels without causing management software tools. business disruption. With Demand Consequently, managed services managed services, if the access customers often experience a link between the customer site boost to the responsiveness of and the provider backbone limits their business applications. This performance, it can be easily Build-it-yourself capacity benefit is not surprising upgraded in most cases without considering that a managed major cost or disruption. With the service agreement power of the provider’s backbone will often replace over a dozen and data centres supporting separate IT contractor companies them, business planners can who are all attempting to work respond immediately to market on their own small piece of and competitive demands, the puzzle – a finger pointing without engaging in lengthy self nightmare! With managed funded deployments and risky services, project management technology selection decisions. and IT workforce efficiency are greatly improved, which can lead to a generally more productive company. Build or Buy? THE CISCO GUIDE TO MANAGED NETWORK SERVICES Introduction Managed Business Closer Choosing Services in case look a service action provider
  16. 16. page 15 of 37 The business case for managed network services Gartner, Inc. Strategic Planning Assumption: Through 2005, the greatest benefit offered by Improved risk management and service providers constantly Managed Service Providers will be the reduction business continuity monitor and manage their core Managed services are very relevant transport resources and customer of risk, not cost. for companies that want to move access networks. towards a consolidated risk management function that By building a business plan around includes, company-wide risk advanced network and IT assessment, business continuity infrastructure, providers can often planning and disaster recovery. achieve better network design, Service providers offer complete installation and support than a backup and recovery solutions company’s in-house team. that can help companies achieve Managed networks and a planned response to floods, managed applications generally fire, industrial accidents, deliver more stable and terrorism and catastrophic failure continuous service with less of IT components that can downtime, which substantially damage customer relations and lowers the risk associated with reduce revenues. failure or degradation of business software. In many cases, serious business continuity failures are not Service providers now have caused by major natural disasters expertise at all levels of the IT or accidents. The cause is more architecture, from low level data typically a combination of pipes to high level applications. unusual application loads This means providers can address combined with relatively minor risk and disaster management lapses in IT, network upkeep or configuration. To avoid failures in complex multi-vendor systems, Build or Buy? THE CISCO GUIDE TO MANAGED NETWORK SERVICES Introduction Managed Business Closer Choosing Services in case look a service action provider
  17. 17. page 16 of 37 The business case for managed network services “Service provider business models have grown up and become better from an end-to-end and top-to- networks and data centres must be understood since the telecom boom bottom perspective that looks at deconstructed or merged into period, and this has improved provider possible failures in terms of existing networks, and duplicate business viability. No longer are business processes, software, resources must be gracefully providers able to build/buy network, hardware and human factors. In combined. To adapt efficiently to construct vague business models and complex, heterogeneous continual change, companies multi-vendor distributed systems, must consolidate and streamline hope it will pay off. Now business this holistic approach is the only their IT planning processes so models need sharper focus, which way that high levels of business that IT governance can be makes it harder to enter the market continuity can be achieved. folded completely into strategic but the result is better plans that are business planning and financial now in place.” More effective decision making management. JAMES EIBISCH, IDC, RESEARCH DIRECTOR summary Today’s business managers are Managed services are proving regularly challenged by to be a major advantage for unpredictable market dynamics companies that are attempting and an ongoing series of mergers, to align IT management with acquisitions, divestitures, business decision making. partnering, and ever changing Managed services must be supply/demand chain well monitored and measured relationships. The business and if service level agreements and financial aspects of all this change contracts are to be effective. are monumental in themselves Because they are well –and there are also the related IT documented, managed services and network issues to be make network and IT departments considered as part of every new business manoeuvre. Acquired more accountable and governable. Build or Buy? THE CISCO GUIDE TO MANAGED NETWORK SERVICES Introduction Managed Business Closer Choosing Services in case look a service action provider
  18. 18. > Managed IP VPN > Managed security > Managed IP telephony > Managed hosting and data > Managed wireless and > Managed Web contact/ page 17 of 37 The business case for managed network services > Managed WAN data services Service providers maintain finances, productivity, sophisticated network, systems responsiveness and decision and asset management systems making. Using these business that create reports which can give drivers as a foundation, we will customers a clear picture of the now examine seven specific current and future capabilities of managed service areas that are available across EMEA: IT/ network resources. The result is a reduction in the uncertainties and lack of information that often plague the IT dimension of business planning. Service providers should be thought of as a knowledge partner who can help company planners make better business decisions. Providers are centre services typically involved in hundreds or thousands of different customer IT architectures, and all this real mobile computing world experience can help business planners anticipate problems and avoid possible IT call centres and network mistakes. Managed services can help stabilise and simplify the IT environment while delivering the advantages of better integration, collaboration, Build or Buy? THE CISCO GUIDE TO MANAGED NETWORK SERVICES Introduction Managed Business Closer Choosing Services in case look a service action provider
  19. 19. > Seamless data/voice/video > Create a foundation for > Improved performance, > Efficient, secure access for > Consolidated and simplified > Reduce expensive parallel page 18 of 37 A closer look – seven key managed > High levels of data security and service areas Diagram 4.0 Intranet, Extranet Managed IP VPNs Benefits delivered by managed and Internet Managed IP VPNs are one of the VPNs: access from most significant trends in IT IP VPN today. IP VPNs can provide connectivity between unified, secure, high performance company sites connectivity for all users, remote sites, distributed applications and powerful distributed extranet partners throughout a applications and multimedia Trading partners company’s IT architecture. In workflows Europe, North America, and other parts of the world, managed scalability and reliability – IP VPNs are successfully replacing leverage the provider’s world- aging frame relay, ATM, and class backbone resources Extranet private line networks and in the process greatly reducing network home and remote users IP VPN complexity and total cost of network ownership. The network infrastructure Firewall Intranet expensive of multiple parallel circuits to each remote site can be access connections reduced to a single cost effective Internet IP VPN access link. access authentication Build or Buy? THE CISCO GUIDE TO MANAGED NETWORK SERVICES Introduction Managed Business Closer Choosing Services in case look a service action provider
  20. 20. page 19 of 37 A closer look – seven key managed service areas A managed IP VPN can transform moving and repurposing processes Managed IP VPNs traffic is secure, monitored and chaotic network resources into a and human resources. This level of controlled by the provider 24 hours a day year round, unified, efficient reliable planning and operational flexibility so the risk associated with distributed applications is communications fabric. The result is is not possible with existing circuit greatly reduced. VPNs can use a variety of security higher productivity for end users based networks. Note that managed and encryption methods to limit the possibility of and IT staff, and more responsive IP VPNs accommodate both older external threats to data and applications. In general, business processes. Managed “hub and spoke” traffic flows and providers of managed IP VPNs can give companies a IP VPN contracts can stipulate that newer peer-to-peer applications, so unified, dependable approach that creates an end-to- network and IT equipment must be consequently they are the ideal end IP connectivity solution. refreshed at periodic intervals. This foundation for companies that are ensures that productivity stays high continually redesigning business Diagram 4.1 as the network keeps up with the processes to adapt to changing Usage and plans latest technology and best practices. competitive challenges. for IP VPNs With traditional frame relay, ATM Managed IP VPNs for improved and leased line networks, virtual IT economics communities of users and Traditional wide area and access applications are created via time networks too often become consuming, manual configuration budgetary black holes that Current use 53% of each virtual network. Managed introduce hidden and Plan in one year 17% IP VPNs in contrast can unpredictable equipment/labour automatically sense when a new expenses into the financial picture. Plan after one year 5% site has been added or removed Managed IP VPNs reduce CAPEX No plans 17% Current use 53% from the company network. costs and free capital for more Plan in one year 17% Because IP VPNs can automatically strategic undertakings. Reduced OPEX comes in the form of Build or Buy? Plan after one year 5% sense changes in network topologies, business planners have lowered recurring line charges and No plans 17% a great deal more flexibility in greatly reduced labour expenses. THE CISCO GUIDE TO MANAGED NETWORK SERVICES Introduction Managed Business Closer Choosing Services in case look a service action provider
  21. 21. > The latest security best > Reduced cost and risk > Reduced productivity loss rom > Proactive administrative > Protection from internal and > Managed security can protect > High performance firewalls page 20 of 37 A closer look – seven key managed service areas > Ongoing testing and Managed security services Benefits delivered by managed Security is an area that has become extremely fast As businesses integrate business security services: moving, new threats and new threat aversion > Detailed reporting of security functions and reach out to customers technologies are emerging every day. For instance, and trading partners through practices, software and firewalls are being built into VPN equipment, routers, networking, there is an increasing hardware switches, and servers. The software for detecting and danger that distributed systems will neutralising viruses and other attacks is advancing all be compromised by viruses, hackers associated with data theft and the time as well. Given the enormous cost and effort it and other external or internal threats. data corruption takes for a company to stay on top of security The most secure IT resource in the technologies, it’s difficult to justify a build-it-yourself world is a sealed data centre with no downtime and network approach. In general, the total cost of ownership is outside links. The more extended outages very high for building in-house security measures. and open business networks There is also a very high cost associated with the loss become, the more vulnerable they of productivity, revenue and intellectual property policies to combat hacking are to security attacks. when in-house security measures fail. and viruses At its best, data security is a highly proactive activity Managed security is one of the external threats that involves constant monitoring of networks, hottest areas of managed services servers and desktop computers on a continual basis. today. There is a very large range of physical assets as well as data Focused security providers protect companies from managed security services on the increasingly sophisticated attacks with the latest anti- market in EMEA, including security virus and anti-hacker tools, managed firewalls, and for servers, local networks, wide area and security resources that are remotely managed remote intrusion detection systems. A service networks, applications, desktop provider’s security teams can remotely monitor and computers, wireless users and so on. protect all the devices on the company network from upgrading of security systems the provider’s secure 24x7x365 data centre. incidences and vulnerabilities Build or Buy? THE CISCO GUIDE TO MANAGED NETWORK SERVICES Introduction Managed Business Closer Choosing Services in case look a service action provider
  22. 22. > Major cost reductions > IP telephony is foundation for > Phone system adapts rapidly > IP phones that can plug into > Unified messaging, directories > One number calling, call page 21 of 37 A closer look – seven key managed service areas > Voice mail and voice/email Managed IP telephony Benefits delivered by managed With IP-based business telephony IP telephony systems: > Auto-attendant and systems and related unified business communication services, service compared to conventional PBXs providers are now able to match and exceed the capabilities of traditional a wide array of powerful enterprise PBX phone systems. e-commerce, collaboration and Many companies are attracted to the customer service applications large cost savings that can be achieved by running voice and data to changes in business on a converged network processes and business infrastructure. But ultimately the organisation benefits of lower costs may be far exceeded by powerful multimedia any standard Ethernet hub training, collaboration and customer- relations applications that are possible when phone services are and search services augmented by computer applications and network services – follow-me, call forwarding the highly coveted goal of computer- and call filtering telephony integration (CTI). integration automated call handling Build or Buy? THE CISCO GUIDE TO MANAGED NETWORK SERVICES Introduction Managed Business Closer Choosing Services in case look a service action provider
  23. 23. page 22 of 37 A closer look – seven key managed service areas In the IP telephony approach, each The low jitter, latency and packet loss “According to Yankee Group data, 76 percent user is assigned an IP address that characteristics of managed IP VPNs of large European enterprises are committed becomes a central contact point for ensure that voice calls will take place to convergence of some portion of their voice calls, messages, conferences, paging, without distortion or disruption. The and data infrastructure within the next two years.” and a wide range of unified internal combination of IP telephony and and external communications. managed IP VPNs delivers inherently [TELECOMMUNICATIONS STRATEGIES EUROPE, FEBRUARY 2004, BY AMY RODGER] strong business continuity An IP telephony system can deliver a capabilities that lower a company’s very high level of functionality; it can risk profile. also greatly lower recurring toll charges by routing calls across the Traditional business PBXs have a company’s data network wherever very long life cycle of up to 8 years possible. Companies that are moving or more. Some companies who to managed IP VPNs are particularly would like to move to IP telephony good candidates for IP telephony. and converged business Business telephone systems are communications are holding back generally considered mission critical, because their phone equipment has with a very demanding requirement not reached the end of its life cycle. for high performance and reliability. But considering the reduced The robust, fault tolerant nature of operating costs and productivity the provider’s backbone and data advantages of IP telephony, waiting centres are the ideal foundation for for replacement cycles is in many IP-based business phone and cases a false economy. Savvy messaging solutions. IP phone companies are using managed signalling and voice calls can be services to move as quickly as routed across a managed IP VPN with great efficiency, using the VPN’s native class of service capabilities. possible toward converged IP voice/data business applications. Build or Buy? THE CISCO GUIDE TO MANAGED NETWORK SERVICES Introduction Managed Business Closer Choosing Services in case look a service action provider
  24. 24. > Cost effective support > Major Web and database > Remote storage/backup/ > E-commerce markets and > Content streaming and > Multimedia streaming, video > CRM and sales force page 23 of 37 A closer look – seven key managed service areas Diagram 4.2 > Telco-grade data centres with Managed hosting and data centre European services Microsoft Exchange Server enterprise drivers For many years, data centres were and other messaging software for convergence > Greater scalability and considered the proprietary inner Source: The Yankee Group, sanctums of corporate competitive server products 2004 prowess. These days many data centre hardware and software Lower staff/training costs 15 resources have become commodities archiving that are best outsourced/tasked to Easier moves, adds, changes 26 focused network service providers. Equipment obsolescence 30 “storefronts” Today there is a very large range of Support bandwith-intensive apps 39 managed data centre hardware and Deploy converged apps 40 applications available from EMEA caching (CDN) Ease of network management 46 providers. Service providers have aggressively invested in data centre Lower operational costs 69 multicast, etc. facilities, servers and personnel, 0 10 20 30 40 50 60 70 allowing them to offer a lower TCO Percent of Respondents compared to self-built and automation (SFA) applications Communication startegies Europe, February 2004, by Amy Rodger managed data centres. In the managed data centre model, Benefits delivered by managed if applications need more network, hosting and data centre services: storage or server capacity, the provider has the resources to scale high levels of performance operations up, so companies can and reliability rapidly respond to changing business needs. larger national or regional IT “footprint” Build or Buy? THE CISCO GUIDE TO MANAGED NETWORK SERVICES Introduction Managed Business Closer Choosing Services in case look a service action provider
  25. 25. page 24 of 37 A closer look – seven key managed service areas Pay-as-you-go data centre services There is a high amount of risk with allow more flexibility in business and the deployment of critical data centre financial planning and finance, as applications, as can be seen in the special projects and unusual spikes in prominent failure of major ERP and demand of customer requirements CRM initiatives. There is also high risk are rapidly addressed without huge associated with system and network investments or lag times. When management systems that attempt to companies build their own data monitor, diagnose, maintain and centres, capacity is much less report on all the diverse networks and scalable compared to the situation devices inside a company. There where the company has an ongoing have been many visible failures of outsourcing relationship with a integrated management systems in provider who has world-class recent years, when companies chose computing resources and secure the wrong products or deployment 24x7x365 operations. methods. With a total core focus on getting system management and data centre operations right, service providers take on the risk of deploying complex network and IT infrastructure, hence lowering their customer’s exposure downtime and wasted expenditures. Build or Buy? THE CISCO GUIDE TO MANAGED NETWORK SERVICES Introduction Managed Business Closer Choosing Services in case look a service action provider
  26. 26. page 25 of 37 A closer look – seven key managed service areas Managed wireless and mobile resources in ways that would computing have been unthinkable just a few Wireless LAN and wireless WAN years ago. computing is rapidly becoming a business-critical dimension to IT. As with wired LANs and WANs, Users are travelling between offices, wireless data services are great cities and countries with laptop productivity and collaboration tools, computers and handheld devices but their deployment is not a “core” that have virtually all the power and activity for most companies. Hence functionality of desktop PCs. Users many managed service providers can check their messages, look up have developed complete managed corporate documents, query wireless and mobile computing backend transaction data and keep in solutions that allow companies to touch with their customers from any avoid the capital expenses, location. At first glance wireless complexity and deployment effort computing may seem like a associated with mobile computing. convenience or an employee perk, but studies have found a substantial ROI is associated with wireless computing investments, due to enhanced productivity, responsiveness, and better customer relations. Mobile computing lets companies leverage their precious internal human and information Build or Buy? THE CISCO GUIDE TO MANAGED NETWORK SERVICES Introduction Managed Business Closer Choosing Services in case look a service action provider
  27. 27. > Rapid deployment of revenue > With the latest mobile > No requirement to develop > Secure provider data centres > Provider economies of scale > Extensive provider help desk page 26 of 37 A closer look – seven key managed service areas Benefits delivered by managed Providers often host wireless wireless and mobile computing: e-mail, scheduling and sales force software in their secure data > Providers can often maintain, generating wireless initiatives centres, where they are accessed by field workers via wireless WAN computing tools, travelling connections. Providers often own employees are free to focus on their own wireless infrastructure customers, field service and which allows them to rapidly field sales deploy managed mobile computing solutions that include wireless WAN internal expertise in a fast- air time, mobile application moving technology area software hosting, end user support, remote management and updates are ideal place to host mobile for mobile computing devices. In applications the wireless LAN area, many providers are actively involved in can mean lower TCO for the deployment of WiFi hotspots for managed mobile computing wireless VPN and Internet access in services company premises and public areas. WiFi is available as a fully and support resources mean installed and managed service in that mobile users will get the many EMEA countries today with support they need for lower TCO and higher resiliency business critical mobile that is possible with the average applications. build-it-yourself approach. repair, and upgrade mobile resources remotely Build or Buy? THE CISCO GUIDE TO MANAGED NETWORK SERVICES Introduction Managed Business Closer Choosing Services in case look a service action provider
  28. 28. > Rapid deployment of powerful > Location independent – virtual > Very flexible deployment > Greatly reduced Capex costs – > Very controlled and page 27 of 37 A closer look – seven key managed service areas > Integrates well with VPNs; Managed Web contact centres Benefits delivered by Managed Before the advent of IP telephony, Web contact centres: traditional call centres required major CAPEX and OPEX expenditures and customer relations and sales a rigid infrastructure with fixed applications physical locations and assets. In contrast, Web enabled contact assets: call centre software is centres combine traditional call embedded in provider’s centre features with Internet- network enhanced communications and affordable pay-as-you-go cost models, customer agents can models. Web contact centres are a work together or separately – major advancement for sales, home, office or boiler room marketing and CRM departments because they allow cost effective customer support via an integrated agents can access system with workflow of email, phone, Web, standard office PCs instant messaging, fax and other human or automated forms of predictable Opex costs: contact. Web contact centres deliver usually cost is per seat or by higher customer loyalty, reduced usage churn, greater customer lifetime value, and reduced sales costs. leverages IP network infrastructure Build or Buy? THE CISCO GUIDE TO MANAGED NETWORK SERVICES Introduction Managed Business Closer Choosing Services in case look a service action provider
  29. 29. page 28 of 37 A closer look – seven key managed service areas Diagram 4.3 Managed contact Companies can build multi-media Managed Web contact centres are centres: Rapid contact centres themselves, but this complete solutions that can be up deployment is another network service that and running in a very short time. with low capital greatly benefits from the economies Web centres can start with as little as investment of scale and provider focus that are one agent and scale up to hundreds part of the managed services of agents as customer demand approach. Given the cost and grows,which frees business planning complexity of building an online and decision making from the contact centre, outsourcing is very constraints of heavy capital often a better option. Web contact investments and long risk centre software runs reliably in a deployment efforts. Managed Web provider’s data centre and can be contact centres are a good choice for accessed by agents on any PC with a companies that need better Web browser (see Diagram 4.3). The customer relations but without the provider takes on the technology risk in-house effort of integrating e-mail, and financial responsibilities by Web, CTI, messaging and workgroup making the virtual contact centre collaboration tools around a central available on a subscription basis. contact tracking database. This approach requires no special CTI, ACD or programming skills on the part of in-house company staff members. Build or Buy? THE CISCO GUIDE TO MANAGED NETWORK SERVICES Introduction Managed Business Closer Choosing Services in case look a service action provider
  30. 30. > Lower total costs compared to > Higher reliability and enforced > Providers generally have more > Providers 24x7x365 operations > Providers will in many cases A closer look – seven key managed > Improved reporting and page 29 of 37 service areas Managed WAN data services Benefits delivered by managed Given the importance of non-stop WAN data services: reliability for network connections between company sites, the WAN self-built WAN services is a natural area for managed network services. It is possible service level agreements for for a company to purchase, WAN links install and maintain its own WAN connections, but there are very few companies that can achieve sophisticated troubleshooting the high levels of reliability and and problem resolutions resources support that a focused managed network services can provide. In addition to reliability issues, the mean less downtime and cost aspects of do-it-yourself WAN better end user support data services are not as good as they may first appear. In many manage and maintain custom cases the hidden costs of ongoing premise equipment on site support, maintenance, repair, configuration, and downtime are much greater than what’s apparent capacity planning for at first glance. The TCO for WAN links managed data services is often superior to the build-it-yourself approach. Build or Buy? THE CISCO GUIDE TO MANAGED NETWORK SERVICES Introduction Managed Business Closer Choosing Services in case look a service action provider
  31. 31. page 30 of 37 A closer look – seven key managed service areas Today EMEA network providers There are many variations but a offer a wide range of managed complete package will deliver an end WAN connectivity services that over to end network service including the entire “lifecycle” of frame relay, edge devices, ATM switches, WAN private lines, ATM, metro Ethernet, routers, network management and other wide area services. Service systems, asset and change providers guarantee service levels management software, help and with binding Service Level support functions, design, Agreements that specify minimum maintenance and so on. In some acceptable performance and cases network providers will provide availability. For mission critical a managed WAN data service based WAN applications, providers are on CPE owned by the customer. In capable of delivering 99.999% the next few years, many large and availability for both core and access small companies will begin to move aspects of the WAN. key parts of the WAN network infrastructure to managed services as the total cost of ownership picture becomes clearer. Build or Buy? THE CISCO GUIDE TO MANAGED NETWORK SERVICES Introduction Managed Business Closer Choosing Services in case look a service action provider

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