BT and Siemens Enterprise Communications to Deliver Global Managed Services

| May 9, 2008 | Business Telecom Services - Europe | Competitive Update


| Analyst: Dustin Kehoe

Current Perspective: Positive
Vendor Importance: Low
Market Impact: Moderate

Event Summary

May 6, 2008 – BT and Siemens Enterprise Communications have entered into a global sales agreement to offer a converged communications solution for large multinational enterprises. The solution formalizes an existing relationship to leverage BT’s MPLS network provide managed communications services based around Siemens Enterprise Communications’ OpenScape unified communications platform. Siemens Enterprise Communications will also provide supporting professional services for its technology services through its OpenScale services portfolio.

Analytical Summary

• Current Perspective: Positive on the partnership between BT and Siemens Enterprise Communications because it builds on an existing relationship to the benefit of both companies. BT gains greater access to an innovative and scalable Siemens Enterprise Communications’ portfolio and its expertise in 100 countries to implement solutions to transform complex, multi-vendor multinational customer environments. Customers will also be pleased to have a single service wrap, standard SLA, and a managed service that can be supported by both companies on a global basis.

• Vendor Importance: Low to BT because the partnership primarily formalizes an existing relationship that was established to support multinational customers. However, the deal outlines engagement rules and go-to-market strategies that allow the two companies to augment one another’s services portfolios in shared accounts as well as opens cross-sell opportunities into each partner’s respective customers.

• Market Impact: Moderate on the managed services market because this type of relationship is unique to BT and Siemens Enterprise Communications in supporting large scale multi-site accounts through a very structured process (e.g., binding contracts and joint business plan). However, there are many competing alliances in the marketplace and this move may only force major rivals, such as Orange Business Services, to consider similar global arrangements to compete against BT.

Recommended Competitor Actions

• Having a very strong MPLS network, large installed base for IP Telephony, and large scale global clients, Orange Business Services should consider developing a similar partnership with Siemens Enterprise Communications. The vendor could be instrumental in supporting some of the operator’s strategic accounts and filling a few holes it may encounter in remote locations well outside of Europe.

• Defensively, European operators should point out to their existing relationship in place with key equipment providers such as Avaya, Cisco, Alcatel-Lucent and Nortel. They would also be wise to opportunistically explore ways to sharpen their capabilities for supporting major outsourcing and transformation deals on a global basis. This will be important for gaining wallet share in many top accounts.

• Competitors could also point out that BT’s main contribution is its global MPLS VPN infrastructure. They could also call out the questionable viability of Siemens Enterprise Communications, noting that pending divestiture from Siemens AG could jeopardize the future of the company’s technology and, thus, the longevity of the partnership.

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Competitive Positives and Concerns

Recommended Vendor Actions

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