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Commentary: Some assembly required

It is encouraging that Microsoft and Nortel view product bundling as a necessary step for taking software and hardware to the telecommunications marketplace.

By Eric Goodness, Gartner Dataquest Analyst

It is encouraging that Microsoft and Nortel Networks view product bundling as a necessary step for taking software and hardware to the telecommunications marketplace.

See news story:
Microsoft, Nortel in Net services alliance
Unfortunately, in Gartner's opinion, the alliance is somewhat lacking because the two companies have not made it easy for customers to launch those products.

For example, a service partner has not been included in the alliance, and assistance from the internal service organizations of Microsoft and Nortel is not offered. Without an expressed professional and support service strategy or a list of service partners to take advantage of, Gartner believes that Nortel and Microsoft have not guaranteed to their customers a full complement of successfully integrated products.

Moreover, Gartner also believes that installation of such Internet services will be complex because it involves integrating core network architecture, desktop software and Internet data-center operating systems. If service providers are expected to do the installation, they will likely require high-level consulting assistance.

IBM's strategy with telecommunications providers illustrates this point. One area that IBM has targeted is telecommunications, where pressure from investors has forced major carriers (such as AT&T and WorldCom) to alter their strategies and restructure so that they can grow as their voice business rapidly deteriorates. Moreover, IBM sees the potential for long-term growth in this sector.

Carriers need IT expertise, however, as they strive to add e-business services to their portfolios, and IBM believes it can play a key role. Specifically, IBM provides server, storage and software technologies as well as applications and application support to help network service providers implement next-generation network infrastructures that support e-business and other services.

Microsoft and Nortel will gain brand awareness from the alliance, but the missing implementation piece of the puzzle must be found before the alliance can really be fruitful. Bundling products is effective, but helping to implement those products in this market is absolutely crucial.

Telecommunications service providers are attempting to build the next-generation telecommunications infrastructure. However, they need both products and services to succeed.

(For related commentary on what to look for in selecting an Internet service provider, see registration required.)

Entire contents, Copyright ? 2001 Gartner, Inc. All rights reserved. The information contained herein represents Gartner's initial commentary and analysis and has been obtained from sources believed to be reliable. Positions taken are subject to change as more information becomes available and further analysis is undertaken. Gartner disclaims all warranties as to the accuracy, completeness or adequacy of the information. Gartner shall have no liability for errors, omissions or inadequacies in the information contained herein or for interpretations thereof.