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IBM, Qwest team on managed services for medium-sized firms

National partnership with carrier is first for IBM in this space, but likely not the last

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Qwest Communications (NYSE: Q) and IBM (NYSE: IBM) today announced a national partnership aimed at bringing a bundle of managed IT and communications services to medium-sized businesses. While not exclusive, the partnership is a first for both companies: IBM’s managed IT offerings have previously been available only to larger enterprises.

“From a global provider like IBM, this is the first time -- especially in the US – that IBM has had that kind of arrangement with major US carrier,” said Lisa Pierce, veteran industry analyst and president of Strategic Networks Group. “Qwest’s lineup, especially in managed services, wasn’t nearly as strong as their bigger competitors, so this gives customers a reason to stay with Qwest or, if they aren’t already customers, to look at Qwest.”

The service offerings will include managed security services, network management services supported by IBM’s Express Remote Management Infrastructure Services (ERMIS) and Advanced Unified Communications services, also managed by ERMIS.

These managed services, bundled with Qwest’s communications services offerings, are expected to appeal to mid-sized businesses because they solve two problems: the need for staff to manage IT and telecom services that are growing in sophistication and complexity and the capital expense of buying the equipment needed for WAN and LAN operations.

“For example, we are offering a managed LAN service, where we put the router on the customer prem and manage that router and the LAN infrastructure as a fully managed offer,” said Eric Bozich, vice president of product management for Qwest’s Business Markets group. “That is something that very large enterprises have a staff and a set of tools to handle. As customers embrace convergence for voice and video over the data infrastructure, managing that LAN is absolutely mission critical. Mid-sized customers may not have the staff or may not have the depth of experience to handle [full convergence]. This is a service that offers all of that technical expertise and monitoring with a portal environment that gives customer a window into how their network is performing.”

Qwest’s sales force will be selling the services to medium-sized businesses – those with around 100 employees at one location or spread over multiple sites. For IBM, this represents a new channel to a new set of customers, said Richard Stomp, vice president and managing director for IBM’s Telecommunications Industry group.

“What we are offering is essentially a scaled-down version of what enterprises are interested in,” Stomp said. That includes a full range of threat-management offerings to cover viruses, spam and other potential attacks. On the network management side, “this is essentially an IBM NOC [network operations center] where we will be managing, monitoring and evaluating network device management and performance and essentially giving the customer insight into performance of their infrastructure before problems exist. That way they can rectify these issues more readily.”

The unified communications offer is “an office in a box,” Bozich said. “It provides them with the equipment they need, ongoing maintenance and support of devices on a 24-by-7-by-365 basis, continuously monitoring the status and performance of their networks.” Medium-sized businesses that had wanted the convenience and productivity of combined voice, data and video can now get it more readily and at a predictable monthly price, Bozich said.

Having the expertise to operate such services provided as a managed offering is key, Pierce said, because such talent often comes at a premium and may be just as hard to retain as to develop. “As important as the saved capex is, the expertise is even more so,” she said.

Qwest’s direct sales force is being trained to sell the bundled offering, Bozich said. “There will be some joint marketing and messaging and branding,” he said. “We want to make people aware of who our partner is in this space. We will work closely with IBM on creating a portal experience that ties in with the customer portal our enterprise customers are already familiar with – it includes a dashboard, metrics, port status and other things that go along with a portal experience. We will be integrating the world-class portal experience that IBM has across these different service categories.”

IBM could well partner with other communications services providers, Stomp acknowledged. Analyst Pierce expects that to happen sooner rather than later, as IBM tries to take the sophisticated managed IT services it developed for larger enterprises further down market.

“I think IBM is looking to grow this part of its business,” Pierce said. “It has some customers for one of these lines elsewhere, and it is in negotiation with a number of other carriers elsewhere, so we will see this as a trend. As communications and IT become more intertwined over time, these kinds of managed service offerings make more and more sense.”

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© 2014 Penton Media Inc.

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