Swisscom Delivers Application Layer SLAs with Ipanema

| Jan 28, 2008 | Business Telecom Services - Europe | Competitive Intelligence Report

| Analyst: Sandra O'Boyle

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

Event Summary

January 24, 2008 – Swisscom has selected Ipanema as a partner for WAN optimization technology. The company provides three modules: auditing, deployment and management and used to provide application-centric SLAs to customers. The service is available with the Swisscom LAN-I product. Prices for the service are between ten to 20% of the total monthly recurring charges per site. Dynamic Bandwidth Allocation with the Advanced Compression feature will not be available until Q2 2008.

Analytical Summary

• Current Perspective: Positive on Swisscom for improving its application performance and monitoring capabilities (with Ipanema) as the operator can guarantee the performance of IP-based applications on nearly an end-to-end basis. This bolsters its managed service offer as a whole and moves the table stakes from network-centric to application-centric SLAs. This is important for developing and aligning SLAs with real business objectives. This type of approach is in high demand from corporate customers, and an area operators need to address much more in 2008.

• Vendor Importance: High to Swisscom, which has introduced Application Performance Management (APM) solutions as part of its managed service portfolio as a means of generating new revenue to offset the decline of traditional transport services. APM is important for customers that want to understand, optimise, prioritise and manage various types and classes of applications running across the network. APM is also important for Swisscom in helping customers address topical issues such as virtualisation and data centre consolidation.

• Market Impact: Swisscom’s introduction of APM will have a moderate impact on the Swiss telecommunications market. National competitors, such as COLT, Cablecom and sunrise are likely to respond with some form of offering, as the idea of throwing bandwidth at the problem of network congestion is no longer credible with corporate customers. However, Swissom’s APM solution will have a low impact among larger carriers (e.g., T-Systems, Verizon Business, Orange Business Services, and BT) as they already deploy these types of solutions for their customers.

Recommended Competitor Actions

• Verizon Business could stress that it is taking a more scalable approach, taking audit right down to the desktop but giving customers tools to change application packet marking and bandwidth on demand for Ethernet tail ends. Customer care online portals are beginning to play a key role by providing real-time application monitoring dashboards, enhanced service level management and optimisation (e.g., increase or decrease bandwidth). This is key to providing customers with high levels of transparency into gaining optimal end user performance for their applications.

• Defensively, BT, Orange, Vanco, and Telindus and Orange Business Solutions should stress that they are also working with Ipanema in delivering these solutions in the market. They should also stress, where appropriate, how their respective multi-vendor approaches gives greater value to customers. Orange Business Services, for example, could point out that it uses Packeteer for QoS/prioritization, Juniper for Layer 7 application acceleration and Riverbed for wide-area file systems and compression.

• National competitors such as sunrise and Cablecom should consider launching similar products. This will be important for sunrise in improving its MPLS VPN offering in the national market, and Cablecom in improving its recent offerings to the business segment. COLT Telecom should also consider investing in this area in Switzerland and across Europe. This will help the company climb the value chain to support its customer requirements.

Recommended End User / Customer Actions

• IT Managers should turn to solutions such as Ipanema to gain better visibility, control and management of the network and the applications running across the top. This will be important for cost-savings, but also has strategic value for consolidation and virtualisation. This is becoming a major trend in 2008.

• End customers should also be aware of other solutions on the market such as Riverbed, Cisco WAAS, Juniper WXC and Packeteer. They should also be aware that most carriers across Europe offer some form of application management to enterprise customers. Such solutions will become more common in a carriers managed services portfolio.

CLIENTS ONLY

Current Perspective

Competitive Positives and Concerns

Recommended Vendor Actions

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