If communication service providers want to impress Canadian multinational corporations, they should continue to forge strong ties with data- and IP-specific firms, according to industry observers at The Yankee Group. This was the main conclusion of Carrie MacGillivray, a Yankee Group Canada analyst in Ottawa, in a presentation she gave at the TeleManagement Live 2005 conference in Toronto last week.  Companies like Bell Canada, Rogers Telecom Inc. and TELUS Corp. would do well to acquire more technology-specific businesses to compete against the multinationals’ preferred data and IP provider, AT&T Corp. This was the primary highlights of The Yankee Group’s Global Network Strategies Survey, which tracks multinationals’ use of, plans for and challenges regarding worldwide connectivity.  MacGillivray says some service providers are on the right track: "Bell Canada has done a number of acquisitions, and so has Allstream, to increase their arsenal of expertise." Allstream, for instance, bought Delphi Solutions Corp., which gave the carrier greater IP equipment installation proficiency. The Yankee Group’s study shows that AT&T owns the biggest piece of Canadian multinationals’ spending on data and IP links at 18%. IBM has the second largest slice at 17%, Bell has 13%, Telus has 7%, Allstream has 5% and Rogers has 4%. IBM’s second-place status suggests systems integrators have penetrated the data-IP services market, The Yankee Group says. It’s a different story in the voice services market. Here traditional telecom providers rule, and systems integrators struggle for a share of the spend. According to The Yankee Group, Bell has 35% of the voice market. AT&T is in second with 23%. Telus has 6% and IBM has just 5%. It seems now is a good time for carriers to beef up their global offerings. Multinational companies are spending more money on IT and communications these days. "It’s for the transition to IP, or to acquire better applications," not to mention hardware to support the apps, MacGillivray says. "On the communications side, starting to realize maybe it’s time to integrate IP into the contact centre, or the voice system. We may be over the early-2000s, when budgets were really tight. They’re starting to loosen up again." Still, Canadian multinationals aren’t spending on everything. For instance, these global-reaching enterprises tend to maintain their voice and data networks with in-house staff, instead of outsourcing the task to service providers, hardware sellers or software vendors. The Yankee Groups says this makes it tough for vendors to reap recurring maintenance contract revenues. "It’s probably partially job preservation; IT departments and telecom groups don’t want to give that up," MacGillivray says. And companies generally feel they can do the job better than the carriers. "The key for the service provider is to try to convince businesses that they (carriers) have the better expertise, that they can take care of the network better, and do it for cheaper." The Yankee Group discovered that large and small multinationals have different opinions about network values. Companies with more than 5,000 employees are likely to consider productivity, administration and advanced applications in their decisions to implement voice-data convergence. It seems the "productivity" message that equipment makers like Avaya Inc. and Cisco Systems Inc. have been pushing for over a year now are hitting home for the big guys, but not necessarily the little ones, who prefer to hear about how convergence equals lower total costs of ownership (TCO). MacGillivray’s advice: talk to the big customers about advanced notions; talk to the little firms about tacticals like TCO. The survey results seem to bust myths about what particular industries are doing with technology. For example, you might think financial service firms would put network security at the top of their tech-challenges list. But in fact manufacturing companies worry more about security than the banks and insurance companies do.  The money-minders are more concerned with cost savings, and 38% of manufacturers are testing or using MPLS. The number puts the industry ahead of others. So much for the notion that Canadian manufacturers are behind the tech-adoption curve. The Yankee Group also points out that 49% of multinationals plan bandwidth increases to Asia, which suggests carriers should continue to strengthen their connections into that continent. All of the above leads The Yankee Group to certain conclusions. Among them, "benchmark and maintain a vigilant understanding of systems integrators," the analyst firm advises carriers. "Surveys illustrate the growing presence of companies such as IBM and EDS." As well, "observe trends for offshoring to Asia and prepare for growing demand for transpacific and continental capacity."