Siemens benefits from managed network provider

06.02.2006
Siemens AG's global corporate voice, video and data network connects about 417,000 users in 1,600 locations, posing daunting challenges for network administrators.

To help relieve the difficulty of passing corporate applications and other traffic efficiently across the WAN boundaries of various service providers, Munich-based Siemens enlisted the help of a virtual network operator in late 2004, said Alfons Kuhn, director of the Siemens corporate network.

Now in its second year of operation, Siemens' managed network approach "is working fine... we have great performance improvements," Kuhn said in a recent interview.

Vanco PLC, a London-based virtual network operator first established in 1988, handles the Siemens traffic and has helped the company realize a "major savings" in annual network costs, which are in the low billions of U.S. dollars, Kuhn said. He would not share more details.

A Vanco spokeswoman said the company won its networking contract with Siemens in late 2004 for a term lasting three years. Kuhn refused to disclose the cost, but Vanco said the three-year deal was worth US$5.59 million at the time.

Siemens chose Vanco over five other network providers, Kuhn said, but he would not name the other vendors that bid on the contract. He said the negotiations took several months.