Network companies provide internal and external infrastructures for customers to run business applications and transport their voice, video and data traffic between different users and locations. Companies aim to grow by carrying increasing volumes of traffic cost-effectively and stimulating the development of new applications that will generate revenue from additional network traffic.
A key objective for network companies is to reposition themselves as strategic business partners rather than equipment suppliers. They do this through leadership programs aimed at business and financial decision makers, as well as their traditional target audience of technical decision makers. White papers and presentations explain how the right network can help an organization collaborate more effectively, improve customer service, reduce communication costs and streamline business operations throughout the supply chain.
To deliver the strategic services, network companies must first achieve the objective of building an end-to-end network with national or global coverage. An end-to-end network enables a customer to communicate quickly and easily with any other location connected to the network. When a network company has built a single network that reaches locations worldwide, it can offer a single-source service to customers who need to business on a global scale. An article on the website Mergers, Acquisitions, and Joint Ventures described Cisco Systems’ strategy of acquiring component manufacturers where the same purchasing decision makers buy both companies’ products.
Network companies can achieve their revenue goals by offering a wider range of services over the same network. Service providers originally built separate networks to carry voice or data traffic because of their differing technical requirements. The latest multi-service networks are capable of carrying voice, data and video traffic on the same network. Network companies with multi-service infrastructures can offer customers a single source for all their traffic, increasing revenue and strengthening customer relationships.
As networks grow more complex, many organizations find it difficult to manage the network using their own resources. Network companies should set a goal of developing a range of support services to take advantage of the revenue opportunity. The Insight Research Corporation forecasts growth in spending on managed services at a compounded rate of 12 percent between 2010 and 2015. Network companies can deliver those services using their own staff or work with a quality-controlled service partner.
When customers run more applications on a network, traffic and revenue increases for the service provider. An important objective for network companies, therefore, is developing new applications internally or collaborating with independent developers. AT&T, for example, introduced a collaboration program that enabled developers and technology start-ups to partner with the company and accelerate new application development.
Given the rapid changes in technology, network companies must develop a strategy for staying ahead of change. Cisco Systems’ corporate overview explains how the company aims to capture market transitions, such as the move to a single network for all traffic. This enables network companies to help customers evolve as their industry and needs evolve.