Cisco targets IP-VPN managed services market

BANGALORE: Eyeing the potential requirement for managed services in enterprises, Cisco is rolling out a program along with service providers who use Cisco equipment.

Called the Cisco Powered Network (CPN), the program would initially offer managed IP VPN services to customers.

“Looking at the momentum of managed services in call centers which are outsourcing their network management to service providers, enterprises are also exploring the opportunities to do the same,” said Sudhir Narang, senior VP - Service Provider.

In India, companies like UCO Bank, Bajaj Auto, Development Credit Bank, Hutch and Blue Dart have already gone in for managed services. Narang said that opting for managed services decreases the operating expenditure for enterprises and reduces costs by 25 per cent.

Cisco has tied up with service providers including Tata VSNL and Bharti for IP VPN services. Narang said that other services like security VPN, IP telephony would be offered soon.

Under the CPN program, Cisco would provide quality of service assurance for IP-based services for enterprises, roll out joint go-to-market strategies along with the SPs. The company will fund 20 per cent of the service provider's marketing campaign on managed services for enterprises.

Besides the enterprise segment, the CPN program plans to target the SMB segment and also the government.

Global managed services reports plug managed services as a good revenue opportunity for service providers over the next five years. The managed IP service market alone is expected to grow from $20 billion in 2005 to $41 billion in 2009.

An Ovum report predicts that of the five IP managed services (IP Voice, IP VPN, Network Security, Network Storage, and Metro Ethernet), IP VPN represents the largest market opportunity (53%) while IP Voice is expected to grow the fastest (65% CAGR).