Harris Stratex takes on network management
IP backhaul vendor remaking itself as a managed services company as Open Range outsources its NOC management
Ericsson (NASDAQ:ERIC) and Nokia Siemens Networks (NYSE:NOK, NYSE:SI) aren’t the only companies taking advantage of the growing interest in the US in network managed services. Harris Stratex (NASDAQ:HSTX) may be small in comparison, but the carriers it is pursuing are also of the smaller variety. Rural WiMax provider Open Range Communications has become the first operator to turn over its network operations management to the IP backhaul vendor, but Harris Stratex is courting other smaller operators in hopes of becoming a miniature version of its Tier I vendor counterparts.
Unlike the blockbuster outsourcing deal Ericsson signed with Sprint (NYSE:S) last month, Harris Stratex isn’t taking over Open Range’s day-to-day operations. Instead, Harris Stratex has agreed to run its network operations centers for five years, akin to the NSN’s contract with Embarq to take over its NOCs in 2008. Harris Stratex vice president of global services Keith Donahue said the vendor makes a big distinction between what it does, managed services, and outsourcing, which involves taking a carrier’s entire networking operations in-house, including its employees.
“We have neither the scale nor the balance sheet to do that, but we have the resources to manage the network infrastructure for smaller operators,” Donahue said. The small operator market is a particularly ripe one, though, Donahue pointed out. Many Tier 3 or rural operators don’t have the resources to run their own NOCs, instead relying on their vendors to monitor their components in the network as part of ongoing maintenance and service contracts. Only the large operators have the finances and scales to build and run their own NOCs.
“The majority of carriers never make the investment in a network operations center,” Donahue said. “They treat every vendor’s equipment as discreet domains.” Harris Stratex is offering them something those operators have never had, Donahue said, a centralized and integrated network management and operations solution.
The business model comes with a lot of flexibility, Donahue said. Rather than take over network management completely, Harris Stratex can act as a redundant operations center during emergencies, or it can work the graveyard shift for an operator that handles its own network management only during business hours. A contract could be as basic as a simple network monitoring agreement, or Harris Stratex could take over the management of field technicians and staff, Donahue said.
Open Range is no tiny rural cooperative, though. It plans to build WiMax networks using Alvarion (NASDAQ:ALVR) equipment in 546 rural markets covering 6 million people in 17 states. It’s also partnering with Globalstar (NASDAQ:GSAT) to use its satellite spectrum to create a hybrid WiMax-satellite broadband service. While Open Range has more resources than most, the managed services contract with Harris Stratex will free the company to focus first on its deployment and then on innovating services, while Harris Stratex minds the shop.
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