Managed Services for Enterprises - Telco Operators and Vendors Capitalize on the Need of Businesses to Focus
Pyramid Research, Inc, January 2011, Pages: 43
As enterprises face increased financial pressure, they’re looking to managed services to offload capex and improve operational efficiencies. Additionally, enterprises are turning to managed services to enable them to focus more attention and money on core competencies. Managed services free up valuable information technology (IT) resources, decrease staffing needs and enable enterprises to invest in activities that differentiate them from the competition. This demand for managed services has spurred significant action on the part of technology vendors and telecommunications operators. Vendors like HP, Cisco and IBM now provide managed services that include contact center management, call center, network and performance management and more. Operators like Orange, AT&T and Verizon are also committed to expanding their portfolios with managed services, especially in areas such as network security, data center, videoconferencing and telepresence.
Managed Services for Enterprises focuses on network-centric managed services offered by operators and technology vendors in areas such as network security, data center, videoconferencing and telepresence to enterprises. First, we leverage our enterprise survey data to highlight emerging market opportunities for telecom operator- or vendor-managed services. Second, we mine the survey results and present a case study to determine the key reasons why enterprises of all sizes have embraced and are benefitting from managed services. Third, we examine industry trends over the next 18-24 months. Fourth, we highlight key target enterprise markets for operators and vendors looking to expand their managed services footprint. The report concludes with a demand analysis and recommendations for operators and technology vendors.
Key findings include:
- A significant number of enterprises are willing to spend large portions of their IT budgets — between 10% and 20% — on network-centric managed services, as operators and vendors continue to prove the value and reliability of their offerings.
- The majority of enterprises — almost 60% — already use a managed service and have been doing so for between one and four years, a major coup for operators and vendors.
The European market has had the strongest uptake in managed services, driven in large part by the challenges of managing and maintaining business across multiple borders. However, the economic recession has led more North American enterprises to incorporate managed services into their business ecosystems in order to lower costs and improve employee productivity. Additionally, emerging markets, such as those in Africa and Latin America, are ripe for managed services, especially as
Key Questions Answered
- Why are enterprises adopting managed services?
- Who are the key managed service providers?
- What industry trends are emerging for managed services?
Target audience
Telecom network outsourcing providers:
Gain a fresh perspective on where the telecom managed network services industry is going and the challenges that lie ahead. Identify successful strategies for introducing and promoting advanced, high-margin services to network operators; draw on the experience of others to help your clients grow and prosper.
Network operators:
Learn how managed services and network sharing can offer cost benefits and revenue opportunities. Anticipate changes in the telecom managed network services industry. Understand why outsourcing your network management allows you to shift your focus to the areas that matter the most, particularly your relationship with the customer.
Investors:
Use this analysis to understand who is best positioned to succeed and to assess upcoming opportunities.
Equipment and application providers:
Develop an understanding of how the role of telecom managed services is evolving, particularly in machine-to-machine managed services, and how this will affect your market leverage over both the short and long terms. Use these insights to successfully position your offerings and enhance your value proposition.
Table of exhibits
Acronyms and abbreviations
Companies mentioned in this report
Executive summary
Introduction
Section 1: The managed services value proposition
1.1 What’s in it for enterprises and MSPs
1.2 Savings in capex and opex
1.3 Case study: Keys to sustaining managed services relationships
Section 2: Surveying the market: Enterprises tell all
2.1 Survey scope, methodology and demographics of participants
2.2 Enterprise demand trends for managed services
2.3 Enterprise investment levels in managed services
2.4 Enterprise considerations in selecting managed services providers
Section 3: Emerging opportunities for managed service providers
3.1 Managed services trends
3.2 Case study: Managed M2M services
3.3 Vertical markets that will gain momentum
3.4 How to expand a managed services footprint
Section 4: Target enterprise markets for operators & vendors
4.1 Where to expand managed services
4.2 Geographic breakdown of markets for vendors & operators
4.3 Demand analysis and recommendations
4.4 Best markets for managed services providers
Related resources
Table of exhibits
Exhibit 1: Capex & opex savings created by managed services
Exhibit 2: Sizes of enterprises represented in the survey
Exhibit 3: Breakdown of survey respondents by country
Exhibit 4: Annual revenue of enterprises represented in the survey
Exhibit 5: Industries represented in enterprise survey
Exhibit 6: Percentage of enterprises that use managed services
Exhibit 7: Length of time enterprises have used managed services
Exhibit 8: Most important factors for choosing managed services
Exhibit 9: Managed services currently or planned to be used in the next three years
Exhibit 10: Managed services most likely to be implemented over next 18 months
Exhibit 11: Factors that would cause enterprises to stop using managed services
Exhibit 12: Amount spent annually on managed services
Exhibit 13: Percentage of IT budgets spent on managed services
Exhibit 14: Enterprise spending for managed services expected over next 18 months
Exhibit 15: Criteria for choosing a MSP
Exhibit 16: Enterprise preference for types of MSPs
Exhibit 17: Factors affecting decision to outsource IT services
Exhibit 18: Industry trends to expect over the next 18 months
Exhibit 19: Components needed for managed services success
Exhibit 20: Enterprise markets directly targeted by vendors & operators
Exhibit 21: Vertical markets targeted by vendors & operators
Exhibit 22: Global deployment of managed services by MSPs
Exhibit 23: Challenges faced by MSPs
Exhibit 24: Best target audiences for managed services for next 18 months
Exhibit 25: Managed services that present strongest growth & most competition
As enterprises continue to seek ways to contain costs and limit spending, they will invest a large portion of their IT budgets on network-centric managed services. This willingness to spend more money on managed services should serve as a wake-up call for operators and vendors, according to a new report.
Managed Services for Enterprises: Telco Operators and Vendors Capitalize on the Need of Businesses to Focus focuses on network-centric managed services offered by operators and technology vendors in areas like network security, data center, videoconferencing, and telepresence to enterprises. First, this report leverages Pyramid's enterprise survey data to highlight emerging market opportunities for telecom operator- or vendor-managed services. Second, it mines the survey results and presents a case study to determine the key reasons why enterprises of all sizes have embraced and are benefitting from managed services. Third, the report examines industry trends over the next 18 to 24 months. Fourth, the report highlights key target enterprise markets for operators and vendors looking to expand their managed services footprint. The report concludes with a demand analysis and recommendations for operators and technology vendors.
Enterprises indicated the two most significant variables for choosing a managed service are to gain a competitive advantage and to save on capex costs. As a result of the recession and its continued effects, enterprises are being forced to cut costs, indicating the largest incentive to invest in managed services. "A significant number of enterprises are willing to spend large portions of their IT budgets – between 10 percent and 20 percent – on network-centric managed services, as operators and vendors continue to prove the value and reliability of their offerings," says Denise Culver, Analyst at Large at Pyramid.
"While growth in revenues from traditional businesses continues to slow down, and in some instances, declines, operators, and vendors alike can expand their managed services offerings to replace that lost revenue," says Culver. According to survey respondents the two factors that would most likely affect an enterprise's decision to outsource its IT services are better applicability to business processes and the ability to lower costs. "This presents a tremendous marketing and educational opportunity for MSPs. Vendors and operators with large advertising budgets – such as Oracle, BT, and Motorola – have the chance to promote managed services to enterprises, thus driving up usage. As this happens, it will drive adoption of managed services further down the chain to those MSPs that don't necessarily have the marketing power of large players," she adds.
"MSPs will also drive adoption of managed services, as they move away from focusing on IT-centric managed services and develop other opportunities
that enable them to increase loyalty and drive down costs," Culver points out. Virtualization, M2M, network security, and VoIP have been identified by MSPs as key drivers for managed services to be adopted by enterprises.
- AT&T
- Avaya
- BT
- Chanel
- Cisco
- Dolce & Gabbana
- Donna Karan
- Endesa
- Ericsson
- Genesys
- Global Crossing
- Google
- Heuliez
- Hewlett-Packard
- IBM
- India Telecom
- Integralis
- Juniper
- Luxottica
- MegaPath Inc.
- Michelin
- Microsoft
- Mitel
- Motorola
- NEC
- NetServices Plc.
- Nokia
- Nortel
- Oakley
- Oracle
- Orange Business Services
- Pacific Star Communications Inc.
- Polo
- Ralph Lauren
- Ray-Ban
- Samsung
- SAP
- SecureWorks
- Siemens
- TeleCommunication Systems Inc.
- Telefonica
- Verizon
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