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Demand for Managed Services on the Rise

The number of E-rate funding requests for managed services has risen dramatically over the past five years. From 2009 to 2013, the number of competitive bids for managed telecommunications and/or Internet services nearly quadrupled. Early indications for FY2014 are that the demand will rise even higher.

Managed services allow schools to receive the benefit of certain networking equipment, such as wide area network or voice telephone switches, by contracting with vendors who own the equipment and host it at an offsite location. The FCC’s current priority system encourages applicants to select these types of services over internal connections purchases, even in cases where it is more cost-effective to own rather than to lease the equipment.

Looking ahead to FY2014, it appears that schools are embracing the concept of managed services. As of November 12, 319 Form 470s referencing P1 managed services have been posted, double the number that had been posted at this time last year.

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