There is no denying IT and communications technologies are evolving at a head-spinning rate, requiring continued investments in infrastructure refresh, staff training and organizational restructuring. Managed and hosted services can help relief the burden on overwhelmed IT staff and provide access to superior expertise at predictable monthly costs. But are businesses seriously considering managed services?
Frost & Sullivan’s 2010 communications & collaboration technologies end-user survey, which targeted 200 North American C-level executives, reveals that 62% of respondents’ organizations currently use managed services. Of those current users, 63% plan to increase usage over the next 12 months, and an impressive 42% of non-users intend to implement managed services within the near term. The main reason (stated by 36% of respondents) why businesses choose to pursue managed services is the need to consolidate multi-vendor relationships and solutions management, followed by limited expertise in new/specific products and technologies (34% of respondents).
Here is how respondents ranked the drivers for using managed services:
Businesses can use managed services from a variety of market participants, including vendors, VARs, systems integrators and telcos. The following chart shows that most of our respondents choose to outsource managed services from their vendors:
No surprise there – no one know Avaya better than Avaya, and no one knows Siemens better than Siemens. Also, most vendors are better equipped with remote technologies and NOC facilities to provide QoS and performance management than their smaller resellers.
But almost a quarter (23%) of respondents indicate they use several different managed services providers. While this scenario presents the advantages mentioned above, it is not very cost-effective. Frequently, each vendor relationship is managed by a separate group of people adding a significant overhead. Each contract needs to be negotiated separately and it’s hard to leverage any significant discounts or economies of scale. Businesses find themselves in this situation because they typically manage disparate, multi-vendor infrastructures as a result of M&A or due to varying technology requirements by site or remote location.
As businesses look to consolidate their infrastructure and develop a more coherent roadmap for the evolution of their IT environment, a strategic partnership with a single managed services provider can offer the greatest benefits in the long term.
A recent announcement by Siemens Enterprise Communications about enhancements to its OpenScale services portfolio point to vendor efforts in the following key areas:
- Portfolio standardization and simplification (3 standard options based on degree of support required)
- Flexibility for potential customization (site-selectable SLAs, custom reports, ability to add modular components to the main package – e.g. MACs, proactive software updates)
- Channel benefits (active monitoring exclusive for channel partners, possibility for e-bonding with partner billing and management systems; sell-through and sell-to options available)
- Multi-vendor managed services (across Siemens and non-Siemens data networking and call control platforms and applications)
- Comprehensive package of application, server and network management
- Global delivery
Other communications vendors, VARs and systems integrators are ramping up their managed services capabilities as well. I put together a table comparing the different types of managed services providers based on a set of criteria, which I believe are important for end users looking to select a managed services partner:
Each customer case is different, but a systematic approach to selecting a managed services provider could ensure that all enterprise requirements are properly addressed in the contract:
As we eagerly anticipate the New Year, we are all wondering what it holds in stock for us. Will the global economy continue on a growth path or will there be more turbulence in certain geographic regions or industry sectors? Where will the next natural disasters strike and how will we be able to cope with them? What role will technology play in the economic recovery and man’s continued strive for power over nature?
From a more pragmatic point of view, we also wish to know if businesses are looking to invest in communications and collaboration technologies in 2011 and beyond. Are technology budgets increasing and where are telecom and IT decision makers looking to spend their money?
Frost & Sullivan recently completed its 2010 communications & collaboration technologies end-user survey, which targeted 200 North American C-level executives and identifies their investment priorities and adoption drivers for advanced technologies including IM/presence, UC, audio, web and video conferencing, telepresence and collaboration. The survey revealed that the majority of decision makers seek to increase or maintain their investments in advanced IT and communications technologies over the coming year. An impressive 50% of respondents expect their communications and collaboration budgets to increase over the next 12 months, while 47% say their budgets are likely to remain the same. Respondents explain budget increases with the need to improve productivity and to take advantage of technology advancements.
Approximately half of surveyed companies allocate up to 30 percent of total expenditure to IT. Sixty percent allocate up to 30 percent of total expenditure to communications and collaboration technologies. The largest share of the surveyed companies allocate up to 15 percent of their communications budget to new technologies, such as unified communications and collaboration. CEOs, CIOs, and CTOs have the most influence at the final budget approval stage.
Generally, respondents evaluate all communications and collaboration technologies as similarly important. Improving collaboration and productivity across geographically dispersed teams prove to be the primary benefits among the majority of tools. It is also worth noting that most surveyed technologies satisfy or even exceed C-level executives’ expectations. Yet, current and future demand for specific communication and collaboration tools varies based on perceived value to the organization.
Similarly, demand for advanced communication and collaboration technologies varies by industry (vertical).
As businesses look for operational efficiencies and revenue growth in 2011 and beyond they will seek to invest in technologies that deliver a competitive advantage. For detailed industry forecasts by product segment and geographic region, please visit www.frost.com.
Happy New Year!
Dear vendors, service providers and channel partners,
We are looking to evaluate the potential impact of President Obama’s Stimulus Bill on the U.S. information and communication technologies markets. While this program is likely to foster demand for various IT and communications solutions, we are finding that the impact is going to vary based on each market participant’s vertical market strategy, portfolio specifics as well as geographic coverage. Further, we believe the Stimulus Bill requires considerable internal restructuring and reorganization on the part of some vendors and service providers.
Please help us validate our initial findings and assumptions by responding to a very brief, 10-question online survey. All responses will be kept confidential and the results will be aggregated. The highlights of our final findings will be posted on our website – http://www.frost.com.
Here is the link.
Thank you very much in advance!