Nemertes Impact Analysis: VNOs Target Underserved Market; Challenges Lie Ahead

Nemertes Impact Analysis: VNOs Target Underserved Market; Challenges Lie Ahead

By Robin Gareiss, Executive Vice President and Senior Founding Partner

When the time rolls around to go out for a wide-area-network bid, most IT executives cringe at the time, complex pricing tables, and 3-inch-thick binders of information from five or 10 carriers. Virtual network operator Vanco (LSE: VAN.L) is trying to make that process easier with a new portal that lets organizations receive online pricing for global MPLS networks.

Will this type of portal replace the RFP process? No, but it will make it easier for companies to get a budget price and to do quick comparisons of different MPLS options. It may make it easier to eliminate some carriers right up front—or add some new carriers that were otherwise unnoticed but still solid options.

Vanco is one of a handful of so-called VNOs. Others include privately held Virtela and Sirocom. These companies are the latest version of global aggregators or resellers, basically trying to leverage the collective innovation and capacity of hundreds of MPLS networks worldwide while giving their customers a single point of contact, implementation, security, and management. VNOs are growing between 40% and 100% annually, and they focus on companies with revenues from $200 million to $3 billion.

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