AT&T, Cisco partner for managed services

Cisco Systems and AT&T today announced they are expanding their partnership to sell managed services and equipment to medium business and smaller enterprises. The two companies said they are aligning their marketing and sales forces as well as forming advisory councils to investigate new managed services technology based on customer feedback.

AT&T vice president of strategic partnerships and alliances Jack Crawley said this agreement is not just another “I love you, you love me” alliance. Cisco and AT&T expect to get real gains out of this partnership by focusing on selling managed services to a business segment that has been traditionally passed over for the high-end enterprise market.

AT&T and Cisco started their joint effort two years ago when Cisco began selling AT&T circuits and services along with its routing equipment and software. Since then the two have brought the AT&T sales force into the mix and are now extending the effort into both companies’ indirect sales channels.

The partnership will offer 17 separate services, including IP VPN, IP network security, metro optical and Ethernet services, managed router services and hosting services and voice/data integrated-access services. The two plan to package equipment and service in one offering, opening up managed services to smaller and medium businesses that would normally not go through the trouble of separately procuring circuits from AT&T and buying equipment from Cisco.

Cisco has struck similar partnerships with SBC, Sprint and other carriers, but Cisco officials said this alliance it’s broadest so far. Not only does it cover the breadth of both Cisco’s and AT&T marketing and sales forces, the agreement will eventually produce new services and equipment tailored for individual customers.

AT&T meanwhile, has been committed to transform itself into a managed services carrier. With long-distance a mature business and its wireless and cable assets gone, AT&T has focused on selling more and more services to its enterprise customer base. AT&T officials said its managed services revenue grew 20% in 2002, while managed services revenue industry wide grew an average of 5%.