Digital showroom

Start-up carriers often need assistance with developing and building their network architectures and marketing their businesses. And often those carriers choose one vendor exclusively for assistance and equipment to take advantage of an easy-to-manage network, volume discounts and the brand name recognition the equipment vendor provides.

The Cisco Powered Network logo is everywhere. It is attached to carrier networks as if it were the seal of an exclusive club on the breast pocket of a navy-blue sport coat. Lucent Technologies and Nortel Networks do not yet have similar branded programs for service providers. However, both offer design, development, marketing and financing assistance and have loyal customers.

Alternatively, some carriers believe a multivendor strategy provides innovation, price competition and independence.

Companies in each camp think they have the better deal, and depending on the carrier, each may be right.

Cost is a major issue for young carriers, and the volume discounts that come from one-vendor deals are attractive, as is preferred customer status, said Kevin Mitchell, analyst of service provider networks for Infonetics Research. "If you can package it nicely with financing, it can benefit a start-up," he said. But carriers often can secure a better deal when multiple vendors jockey for the bid, Mitchell said.

Simplicity also plays a major role in the decision-making process for service providers considering an end-to-end package. "A homogeneous network is easier to manage and is a better investment than a hybrid network that becomes very difficult to manage and scale," said Fredrick Smith, vice president of strategic alliances for Rhythms NetConnections.

Rhythms deploys core equipment from Cisco Systems and takes advantage of the manufacturer's brand name recognition and its design and engineering support, Smith said. "When customers come to us, one of the top 10 questions they ask is `Are you a Cisco Powered Network?' We believe it's a strong point of differentiation."

Many carriers like building their networks a la carte, but Broadwing found that working with one vendor held more value. "Cisco didn't say `no' when we said we wanted to do something different," said Dominick DeAngelo, president of data interactive services for Broadwing, referring to the prioritization and service level agreement (SLA) capabilities that Broadwing wanted to implement.

Where one carrier finds differentiation in a homogeneous network, another finds it through the multivendor strategy. Williams Communications believes in the advantages of the latter.

"We have to be able to find the insurgent technologies that will yield improved velocity, cost to build and cost to own," said Matt Bross, senior vice president and chief technology officer for Williams. "The best way to innovate is to have a system where you work with multiple vendors."

Carriers such as Williams, who go the multivendor route, have justifiable concerns, Mitchell said. "The drawback [to single-vendor solutions] is you are stuck with the vendor, and if they are slow to market, you are out of luck," he said.

Other major equipment vendors offer similar assistance to its customers, although not under the auspices of a package deal. Lucent's NetCare program helps customers with network development and offers an optional co-marketing program, said Kathy Szelag, vice president of marketing for Lucent. "New carriers don't always have all the resources," she said.

Success for the customer also means success for the equipment provider. "We get a close partnership with our customers, which gives us the benefit that as their network grows, our revenue grows," said Kevin Outcalt, senior director of service provider marketing for Cisco.

The close working relationship and customer input helps vendors design specific network capabilities, such as the prioritization or SLA capabilities Cisco helped Broadwing implement. "We get access to their knowledge," Outcalt said. "It allows us to continually optimize our products."