The long-standing dilemma for service providers has been how to wring new cash out of the transition to Internet protocol. Based on recent evidence, they are beginning to solve that issue.

Major service providers are packaging IP services in new and enhanced ways, and beginning to sell data as something more than cheap bits. While voice over IP is the prominent offering, there is also a growing list of managed security services, bundling of local access with transport, virtual private networks and a whole bunch of Ethernet offerings.

And as the network technology itself matures, service providers are finally beginning to take advantage of what they have asked their equipment vendors to provide.

For example, WilTel is primarily known for its wholesale offerings but has now branched into delivering storage WANs for business continuity and disaster recovery, exploiting virtual concatenation technology.

"The space is exploding--there are a lot of new applications," said Tony Tomae, senior vice president of marketing for WilTel. "We are still strong on carrier services--we aren't veering from that--but in the enterprise, there are key applications that are recognized as wide area network services, like storage, Ethernet and IP-level services--that we are carving out."

WilTel's offering includes a Sonet-based StorageXtend product that allows customers to get bandwidth in increments of 50 megabits up to 2.5 gigabits. The service uses Nortel's Optical Metro 3500 at the customer premises to do service mapping through General Frame Protocol and Virtual Concatenation.

"We can throttle the service up and down on a monthly basis as needed," said Paul Savill, director of data product management for WilTel. "We buy, deploy and manage the equipment for them."

Global Crossing has added managed security to its portfolio, teaming with VeriSign, and Broadwing is not only rolling out new VoIP services but also Ethernet private networks, in partnership with OnFiber.

Meanwhile, MCI is announcing new services every other day--or so it seems--and AT&T is teaming with Microsoft on network-based Web services.

For much of this, it is still early days, but the encouraging signs are those of innovation in the business service arena.

E-mail me at CWilson3@primediabusiness.com.