Service provider: what’s in an acronym?

CSP (content service provider) is the latest fashionable three-letter acronym, says Frank Dzubeck

Times have changed in the networking industry, as has nomenclature. In the beginning, carriers were the only service providers. Then came deregulation and divestiture, and the industry was awash with acronyms — PPTs, RBOCs, ILECs, CLECs and BLECs.

Next came the internet age, and we created a host of new internet and application service providers (ASP). Today, we still have ISPs, but they provide more than “vanilla” internet access, and ASPs, but they now are software-as-a-service providers.

What has changed is that a whole class of next-generation internet vendors — MySpace, YouTube, Google and others — are categorising themselves as content service providers (CSP), and a vigorous class of next-generation networking resellers called managed service providers (MSP) has appeared on the scene.

An MSP can approach the customer from an IT perspective, leading with applications and IT services coupled with communications connectivity and services. This has been the realm of hosting and outsourcing companies such as IBM, EDS and HP. Another form of MSP can approach the customer from a communications perspective, providing a wide variety of managed fixed and mobile voice, data and video infrastructure and services. Within the corporate marketplace, carriers (AT&T, BT, Verizon and so on) historically has performed the MSP role.

Next-generation, communications-oriented MSPs differ from carriers that provide managed services through targeted market focus, IP-centricity and virtualised services, especially VoIP. Today, the focal customer of a successful MSP is almost always small and medium-sized businesses (SMB).

Price sensitivity, bundled service offerings and outsourced management responsibility are the key buying criteria for new SMB customers.

Numerous flavours of successful communications-oriented MSPs exist. These include:

1) Straitshot Communications, which operates a VoIP-optimised private network with VPN capability, customised application priority, dynamic routing and integrated security services, including wire-speed virus, and intrusion scanning and protection.

2) Cypress Communications, which provides managed facility-based VoIP communications, unified communication, digital and IP phones, business-class internet/VPN connectivity, firewalls, security and audio/web conferencing solutions.

3) Whaleback Systems, which provides a fully managed broadband phone service offering 100% premises-based, IP software-driven service; IP and soft telephones; and an unlimited nationwide calling service.

The continued advances in IP and virtualisation technology are driving more SMBs to consider the ROI advantages of MSPs. Add increasing focus on video and the simple networking reality of 2007 becomes self-evident: Variable yet ever-increasing internal capital expenditures, limited staff and the critical lack of networking expertise are all negatives that create a competitive collision with fixed outsourced-managed operational expenditures as provided by MSPs.

With the advent of broadband technology into the wireless world through 4G and the eventual fixed/wireless services convergence, the evolution of the communications-oriented MSP will accelerate at a rapid pace.

MSPs are expanding into the SMB and corporate marketplaces using bundled voice, data and video services as their entry cards. Natural evolution and customer demand will bring the mobile and cable vendors aggressively into the MSP marketplace. In addition, CSPs are slowly evolving into MSPs.

All CSPs have one common prime motivator: the internet. But there are also several impediments to their success: for the consumer, the impediments are access to a large amount of inexpensive bandwidth and the low latency associated with the quality of the experience; for the corporate or SMB customer, the impediments are limited security-assured access to CSP services and guaranteed network quality of service.

CSPs must evolve into MSPs either through direct investment in next-generation metropolitan networks, merger or acquisition of existing MSPs and/or alliances with fixed/mobile carriers and IT hosting firms, or face economic disaster due to disinterest from their customers.

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Tags cspsNetworking & Telecomms IDservice providers

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