Today internet backbone operator Level 3 Communications (NYSE:LVLT, news, filings) announced a new agreement with Presidio Network Solutions in an effort to enhance its managed service capabilities and add depth to their dedicated internet access and IPVPN offerings. The arrangement will allow the company to leverage equipment from a selection of hardware vendors including ADTRAN, Cisco, Fortinet, and Riverbed Technology.
The services they are looking to add or enhance include management of customer premise equipment such as managed router, firewall, WAN Optimization, intrusion detection, and secure access. That's an interesting list of capabilities because none of them are really things that Level 3 has been known for. It demonstrates that they are gearing up for a more comprehensive attack on the enterprise space.
If they succeed in making their managed services offering more attractive to enterprises, they will increase their addressable market substantially and therefore set the stage for the sustained revenue growth they need. However, there is overhead that comes with such services that Level 3's traditional wholesale focus was designed to avoid. It will be interesting to watch how they manage that balance.
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