Cisco reverses approach with managed services

Kate Gerwig
10 Dec 2010

In an in-depth look at the Cisco managed services organization, ACG Research analyst Lauren Robinette says Cisco Advanced Services is making headway in offering customized service provider solutions and professional services that move away from Cisco’s former “product only” sales approach.

The Cisco services analysis is one in a series of Business Deep Dives on vendor managed services programs (download full report below) from ACG Research, which recently launched a nine-step Managed Services Cloud program for vendors and managed service providers (MSPS) at any stage of their services-development life cycle.

Comparing Cisco’s managed services to those of other vendors, including Ericsson and Alcatel-Lucent, Robinette says Cisco’s services are unique in their ability to enable providers to deliver new managed services using Cisco IP Next Generation Network (NGN) technology to grow their revenue.

Still, getting operators to buy managed services from a vendor doesn’t happen overnight. Robinette points out that “break-fix” contracts on Cisco’s traditional switches and routers make up more than 70% of Cisco’s services’ revenue and fall under its Technical Services group. The Advanced Services product line has been less profitable. Robinette says the vendor is working to become more proactive by launching “smart” services like real-time IP monitoring, reporting and remediation.

Cisco Advanced Services senior director PK Prakash told Robinette that his organization’s mission is to accelerate customer success with Cisco technologies and solutions and to sell architectures and business models for transformation solutions rather than individual products. Market-speak aside, another main goal of the Cisco managed services organization is to help operators differentiate themselves from their competition.

Cisco Advanced Services also includes a professional services organization to help providers with advanced technology spanning the lifecycle of the network.

Among its professional services, Cisco’s “Build Operate Transfer” program includes having Cisco build services, operate infrastructure and ultimately transfer management to the provider.

Its Managed Capacity service is designed to enable service providers to buy only the mobile capacity they need through Cisco to avoid up-front investment costs until they can build customer volume. Cisco’s XaaS service is a hosted services offer with its roots in Unified Communications to increase service providers’ time to market.

Kate Gerwig is executive editor of

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