For enterprise telecommunications managers, IP networks promise many new capabilities, but enterprise IP networks are also far more complex to manage than the legacy time division multiplexing (TDM) networks associated with the public switched telephone network (PSTN). Problems with the complexity of management arise when several areas conflate simultaneously:

· voice, data, and video traveling across the same network;
· broadband traffic replacing narrowband;
· end user mobility across multiple wireless platforms; and
· new customer premises, network edge, and network core architectures.

Corporate IT departments will be challenged to deliver the next generation of business applications and migrate to a converged IP network for all enterprise voice, data, and video applications. In the present complex communications environment, it is the managed service providers that are in the best position to assist the enterprise customer.

The value proposition for outsourcing is apparent. As network costs drop as a consequence of competition, lowering prices and increasing utilization, transport costs come to represent a smaller percentage of the total enterprise application budget. In an unmanaged solution, as network management and application complexity increase, so do the internal costs of managing the increasing complexity. Outsourcing to a managed service provider can actually increase the cost savings as complexity rises.

For the purposes of this report, we focus on managed services within the following boundaries:

· end-to-end network management and monitoring of a customer's wide-area network (WAN) and some management of customer local-area network (LAN);

· data center and application management hosted at the provider's center;

· value-added solutions to basic Layer 1-2 transport services, such as private line, asynchronous transfer mode (ATM), or frame relay services;

· site and technology assessments, installation, proactive management, maintenance, break-fix repair, performance monitoring and reporting, customer premises equipment (CPE) management, and traffic management;

· turnkey services, delivered remotely, managed 24 hours a day, seven days a week, 365 days a year;

· customer reports and online monitoring to validate performance; and

· Layer 3-7 management services, such as class of service (CoS) prioritization, denial of service (DOS) prevention, disaster recovery, and software patching.

Our definition of a managed service......
Market Segmentation

Managed WAN services
Managed IP VPNs
Managed Security
Managed VOIP
Managed WAN by Vertical Industry

Managed LAN services
WAN Extensions
Managed IP Telephony & VLAN
Managed Wireless LANs
Managed LAN Percentage Allocation by Vertical Industry

Managed Data Center
US Managed Data Center
Managed Hosting
Managed Storage
Outsourced Disaster Recovery % Allocation by Vertical Industry
Outsourced Storage Mgmt % Allocation by Vertical Industry

Managed Applications
Managed Software as a Service
US IP TV