Spirent Makes Services Play
Spirent says it can boost its revenues and margins by expanding its ServiceEdge program to create specific service programs, training modules, and a certification process.
"We've been doing this for a while, but on an ad hoc, reactive basis," says Patrick Johnson, Spirent's director of professional services. "Now we have a structure that will give us good margins, as we can reuse our customer experience and the process is repeatable -- and it means our sales guys can sell a defined solution. We've been planning this for a year, and it's going to be a core part of our offering from now on."
So what's on offer and why? Johnson says this is the right time to be upping the services ante as users and vendors alike shift towards next-generation gear, such as 3G wireless, VOIP systems, IPV6, and 100-Gigabit Ethernet. Companies don't have the resources to keep up with standards developments or to plan and see through the tests they need to perform, so they should be receptive to third-party services.
Spirent's services structure comes in the form of three specific tracks: engineering and testing (dubbed ServiceEdge Express), support (ServiceEdge Care), and education (ServiceEdge Tutor). It's the Tutor program that really sets Spirent apart from other testing firms, most of which also have services offerings, according to Johnson.
"None of our competitors offer the same level of training and industry-recognized certification. Anyone can take our online courses, and we have tutor-led, hardware-agnostic courses, too." Spirent has kicked off with 25 online courses, 20 attendance courses, and five certification paths.
The company has hired new staff to put together a core team of 50, says Johnson, but will draw on a wider range of engineers to meet customer demand. And he claims there are already customers and revenues from the service: Alcatel SA (NYSE: ALA; Paris: CGEP:PA), Avici Systems Inc. (Nasdaq: AVCI; Frankfurt: BVC7), Cisco Systems Inc. (Nasdaq: CSCO), and Nortel Networks Ltd. (NYSE/Toronto: NT) are among the vendors that have already signed up; and AT&T Corp. (NYSE: T), SBC Communications Inc. (NYSE: SBC), and Verizon Communications Inc. (NYSE: VZ) are some of the initial carrier customers.
Spirent won't say what its revenue target is from the services unit, and won't be splitting out the revenues when it reports its finances.
Separately, the chairman of Spirent plc (NYSE: SPM; London: SPT), Spirent Communications' parent, provided an upbeat assessment of the market today, describing the spending trend of its telecom customers as "encouraging" (see Spirent Sees Encouraging Trends). The company's share price is up by 45 cents, more than 10 percent, today to $4.59.
— Ray Le Maistre, International Editor, Boardwatch