MCI, Network, Outsourcing, ABN AMRO

MCI wins big managed network services deal with ABN AMRO

20 Dec 2005 | (News)

MCI announced that it has won a major managed network services deal, worth €500m, with Dutch banker ABN AMRO. According to the press release, "the scope of the agreement includes wide-area network, local-area network and security services connecting more than 6,000 ABN AMRO locations in 25 countries, and 200-plus regional network providers. Under the terms of the agreement - MCI will assume overall management and delivery responsibility for ABN AMRO's global networking services." MCI has said this is the second-largest commercial contract in the company's history.

Of course, this network-focused deal comes on the heels of the aggressive IT outsourcing program at ABN AMRO, in which IBM, Tata, Accenture and Infosys have been big winners. The total size of this deal is somewhat smaller than the overall IT outsourcing project, at $2.2bn.

Comment: This is a big win by any standards, and therefore a significant boost for MCI. However, the real significance is in the services provided, in that MCI has been strongly pushing its managed network services capability over the last several months, with a particular emphasis on managing multi-provider networks. This announcement is just the sort of deal MCI has been working hard to win, and the size of the deal is a major bonus. Anyone who doubted MCI's capabilities in this area will now have to re-think their scepticism.

Now, of course, the hard part begins. Taking over the multitude of in-country and regional networks from the current network management team at ABN AMRO will be a mammoth task and will take several years to implement fully, especially with a planned migration to IP. As with any mega-deal there are big risks involved - failure to deliver would not only be costly in its own right, but would also be very negative for MCI's public image. It will therefore have to work very hard to make sure that the deal delivers what has been promised.

However, this is a very positive sign for MCI, and also for its soon to be parent, Verizon. It shows that, far from being worried by the impending changes at MCI, large multinationals - a major target customer base for MCI - are reassured by Verizon's arrival. MCI will be hoping this is the first of many such deals.

Source: by Jan Dawson, Ovum

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