Recruitment agency Reed has renewed a contract with virtual network operator (VNO) Azzurri Communications to supply managed wide area network (WAN) services to over 300 branches in the UK, Australia and Singapore.

The three-year deal, worth £10m, is an extension of a previous deal signed in 2005, which Reed says delivered cost savings of 27 per cent when compared with leasing the same services from multiple providers. As a VNO, Azzurri sources and manages WAN services from third parties on Reed's behalf, constantly reviewing individual contracts to find the best deal and using its "commercial muscle" to negotiate the best price with individual providers.

The contract covers a variety of voice and data communications, encompassing home and business broadband links over Ethernet and MPLS, as well as internal infrastructure and LAN maintenance, line rental, billing minutes, and PABX management. Azzurri also supports voice over IP (VoIP) on a number of Avaya switches that Reed operates in its call centre.

“Azzurri was very keen to keep us as a customer, and we managed to negotiate cost savings of 20 per cent again over three years compared with the savings made as a result of the previous Azzurri contract,” said Sean Whetstone, director of IS services at Reed Recruitment.

While Reed is committed to spending a certain amount of money within the three-year period, it can decide which elements of the managed service it can spend money on according to the company's changing needs.

“There are obviously contractual requirements to fulfil on an annual basis, but we would not necessarily have to wait a year to renew a technology,” said Whetstone.

“For example, Azzurri could decide to change from MPLS to Ethernet on the WAN, which would deliver more bandwidth at less cost, and we could adapt to this once we had been briefed on the necessary internal infrastructure changes and payback period.”

Some organisations baulk at the prospect of a third-party provider controlling mission-critical WAN services, but Whetstone prefers to hand the complex management responsibility to somebody else as long as Reed can effectively monitor service level agreements.

“We have a team at Azzurri that meets monthly, and there is also a portal where we can raise support issues and monitor the performance of live services,” he said.