CARRIERS TURN UP THE JUICE ON THEIR ENTERPRISE EFFORTS

If last week's Networld + Interop is any indication, carriers are moving quickly to correct one of the major reasons cited for the less-than-stellar earnings they posted last quarter: shortfalls in revenues from enterprise networks.

SBC Communications unveiled a new class of managed IP virtual private network services that includes software-based, premises-based and network-based VPN solutions. The suite is a critical component of the carrier's planned national data network, which SBC will complete incrementally as it receives Section 271 approvals. SBC hopes to receive approval in California by the end of the year, but admitted that it would probably be the first quarter of 2003 before it gets approval in Midwest states.

The economic downturn has created a double-edged sword for carriers like SBC: Corporate layoffs have reduced access lines sold and brought a corresponding drop in revenue. At the same time, the layoffs have created opportunities, according to Mark Fishler, vice president of data and IP services for SBC. "Companies are downsizing their IT staffs and focusing on the businesses they're in," Fishler said. The result is that enterprises increasingly are outsourcing their networks to carriers.

The challenging economy is only part of the reason, however, said Keith Falter, technical information director for AT&T's data and Internet services division. Enterprises needed time to develop applications that were in sync with the technologies being turned out by service providers, he said.

"I call it the IP hangover," said Falter, whose division announced enhancements to AT&T's managed IP network capabilities last week. "When technologies get developed, there's always a lag before applications come along."

Sprint made its enterprise pitch last week by introducing a suite of consulting services designed to identify network vulnerabilities and develop tactics for addressing them.

"We're hoping to begin a relationship with the CIO [through the consulting practice], which could result in more transport business in the future," said Dale Bachman, Sprint's security practice manager.

Sprint's goal is best exemplified by Broadwing. The carrier, which last week announced a suite of managed frame relay, ATM, IP and private-line products targeted to enterprises, began a relationship with ClearChannel Radio a little more than a year ago that involved just 25 nodes. Broadwing eventually gave the carrier a contract for 250 nodes, and later 650 nodes.

"We went from 25 nodes to being their sole network provider in a year," said Thomas Osha, Broadwing's chief of staff.