Managed Services

Ericsson Wins SPIT Managed Services Deal

Ericsson AB (Nasdaq: ERIC) has won a seven-year deal to consolidate 3 Italia 's data centers and modernize its Service Provider Information Technology (SPIT) infrastructure, including the operator's OSS and BSS systems and IT hardware. (See Ericsson Wins Managed Services Deal.)

The deal involves the introduction of a new virtualized software environment that, when combined with the move from three data centers to just two, will enable 3 Italia to cut its energy and SPIT costs by an estimated 40 percent and 50 percent respectively. That the operator has turned to Ericsson for this deal is not a major surprise, as the two companies have worked closely together on 3 Italia's network infrastructure since 2005. (See Ericsson Manages H3G Italy .)

Why this matters
There are clear signs that the managed services possibilities for the traditional telecom equipment vendors such as Alcatel-Lucent (NYSE: ALU), Ericsson, Huawei Technologies Co. Ltd. , and Nokia Networks are broadening, with Ericsson showing the way with deals such as the one it announced today in Italy.

Traditionally, managed services deals have involved the vendors running various aspects of a carrier's network and taking operations staff on board. These deals have often been accompanied by related professional services, such as field maintenance, network planning, and consultancy.

But Ericsson is branching out into new areas. Already in the past year or so it has struck a managed services deal with a broadcaster -- Sweden's TV4 Group -- and is scoping out the potential for taking ownership of some networks. (See Will Ericsson Buy Networks? and Telefónica Outsources Pre-Paid Billing.)

It also broke into SPIT managed services recently with a deal to run Telefónica SA (NYSE: TEF)'s pre-paid billing platform, and has further added to its IT services reputation with this 3 Italia deal. (See Telefónica Outsources Pre-Paid Billing.)

The deal is also important as, if Ericsson and 3 Italia's calculations are correct, it shows how much operational expenditure can be saved through an IT transformation process.

For more
Managed services deals are all the rage, but are still largely the preserve of a small number of major vendors:

— Ray Le Maistre, International Managing Editor, Light Reading

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