Risking Customer Relationships for Higher Prices?

Roy Mark

Updated · Sep 11, 2002

A new report from Charlottesville, Va.-based analyst firm CIR says optical-networking vendors “by and large” have yet to live up to the promises they make to their customers when it comes to network management. CIR claims it is “quite an indictment” that, over the last 25 years or so, a typical operations director found within a service provider “has yet to see any software application perform as marketed.”

CIR recently completed a six-month examination of the network-management- systems market and, as part of the process, interviewed all of the major U.S.- based ILEC, IXC and CLEC companies. The results from the carrier discussions point to the fact that, despite the equipment vendors' complaints about terrible market conditions for optical transport and switching products, many of these companies “seem oblivious” to the crucial management requirements that can truly differentiate a manufacturer from its competitors in the eyes of carrier customers.

Furthermore, according to the report, it appears that certain vendors named in the report are risking the rewards of longer-term relationships by demanding higher prices in the short term.

CIR's “Managing the Optical Network” provides insights from the service providers into the various manufacturers in terms of their products, technical abilities and selling practices. Some suppliers that appear to have made substantial strides with respect to network management include Linthicum, Md.-based Ciena , Cisco , Fujitsu, Redback and Tellabs .

However, both Lucent and Hitachi appear to still need to make major enhancements on their software for optical systems. Of the independent vendors, both MegaSys and Micromuse have “established solid reputations.”

CIR's report provides details on the perspectives of U.S. carriers regarding their future functionality requirements, including performance monitoring, server sizing, constraints related to back-office modifications, the actual need for an optical control plane, and reliance on standards. The report goes on to note how and where suppliers can increase their opportunities to generate sales and customer satisfaction.

The report also addresses where senior management within manufacturer and software companies need to focus their attention in order to increase market share and improve their performance in the eyes of their carrier customers.

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