The dawn of service management

The very nature of enterprise network management is about to undergo a fundamental change. In the future, network managers will be focusing less on the traditional tasks of designing, implementing and operating complex LANs and WANs, and more on the selection and management of external service providers.

This shift from network management to service management will require net managers to deal with a whole new set of strategic decisions, such as what parts of the network should be kept private and what parts should go public, and whether voice or data services are to be included. Network managers will also have to negotiate complex service-level agreements (SLA) and monitor them in an environment in which adequate tools to do so don't exist yet.

In the long run, however, network managers will benefit from this shift toward service providers. There will be an unprecedented level of choice in determining support responsibility for the next generation of network and application services. Some, most or all of the services can continue to be managed by the enterprise support staff or turned over to one or more external providers.

The key factors driving shops in the direction of service providers are the explosion in e-business and the difficulty in attracting and retaining qualified staff. For example, Forrester Research predicts that Internet services revenue from business-to-business communications will grow from nearly $4 billion in 1998 to nearly $60 billion by 2003.

And service providers are responding to this anticipated surge in demand. Forrester Research indicates that while worldwide equipment spending for enterprise networks exceeded that for service providers by a substantial 68% to 29% margin, this gap is expected to be narrowed by a factor of three over the next two to three years.

But simply building the infrastructure and offering the services will not suffice. As recent incidents at Amazon.com, eBay and ESPN's Fantasy Baseball site have demonstrated, network outages -- once accepted as a fact of life -- can cost companies millions of dollars and are no longer acceptable.

In addition, network managers are becoming increasingly sensitive to the lost revenue opportunities that occur when poor Web site performance directly results in substantially reduced access traffic. The increasing sophistication of Web management tools is enabling many of these managers to more reliably correlate the occurrence of increased site response time with substantial drops in the number of concurrent online users.

The result is that the once intracompany enterprise network is rapidly becoming the multicompany interenterprise network when e-business becomes the game. And this change not only affects data, but also increasingly voice and video, as well. Consequently, high-quality service tethering of each to the other will become fundamental to the growth of the "E-conomy."

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