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Managed and Hosted Services on the Rise As Telcos Make A Play for the Outsourcing Game - With global service providers (SPs) such as BT and Verizon having significantly ramped-up investments in Asia-Pacific, and regional telcos like Tata, Reliance Communications and SingTel continuously diversifying their offerings
Managed and Hosted Services on the Rise As Telcos Make A Play for the Outsourcing Game

 

PRZOOM - /newswire/ - Singapore, Singapore, 2008/06/24 - With global service providers (SPs) such as BT and Verizon having significantly ramped-up investments in Asia-Pacific, and regional telcos like Tata, Reliance Communications and SingTel continuously diversifying their offerings.

   
 
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Managed and hosted services is poised to constitute a sizeable percentage of operators' portfolio in the next few years.
New analysis from Frost & Sullivan (communicationservices.frost.com), Strategic Analysis of Managed and Hosted Services Market Opportunities in Asia Pacific, finds that the market - covering 13 Asia-Pacific countries ex-Japan - was worth some US$6.47 billion in 2007, and estimates this to grow at a CAGR (compound annual growth rate) of 16.6 percent (2007-2010) to reach a market size of US$10.25 billion by end-2010.

The most commonly contracted outsourced services are managed and hosted infrastructure/network (WAN, data centre, web hosting), managed/hosted applications (software applications), managed/hosted communications, and managed/hosted security.

The increasing maturity in such services has improved cost visibility and granularity, making managed and hosted offerings a more compelling proposition to both large enterprises and SMBs (small and medium businesses). As the market reaches a new dimension of increased price pressures and decreased service differentiation, further compounded by the relatively weaker credit outlook, the need to demonstrate cost optimization and adopt a business value-driven sales approach becomes necessary.

If you are interested in more information on the Asia-Pacific managed and hosted services market study, then send an email to Sarah Lourdes at sarah.lourdes[.]frost.com, with your full name, company name, title, telephone number, fax number, and email address. Upon receipt of the above information, an overview will be sent to you by email.

"Asia-Pac continues to grow both as a global demand and supply centre. In tandem, the emergence of Asian MNCs from India, China and South Korea continues to shape the demand for enhanced connectivity and related services," says Frost & Sullivan industry manager Jay Tan.

"Driven by this rapid development and the corresponding need for more sophisticated ICT infrastructure, yet growing pressure to do more with limited IT budget, companies are increasingly looking at outsourcing the non-core functions to support their critical business processes," he adds.

Other factors driving the adoption of managed/hosted offerings include the growing convergence of IT and regulatory compliance pressures, as well as the emergence of SaaS (Software as a Service) and utility computing.

Managed and hosted services allow companies to benefit from faster business rollout, computing overflow provisioning, efficiency in IT operations, specialized skill sets, and real-time management of mission-critical ICT infrastructure and services; some of which are either not available or too costly to maintain in-house.

To-date, MNCs and large enterprises especially those in developed markets have led in the outsourcing of specific IT services or even management of the entire IT infrastructure, while small and medium companies have been slow to utilize these services on a major scale.

Some of the more mature markets in terms of technology adoption and managed services uptake are Australia, New Zealand, South Korea, Singapore, Hong Kong, and increasingly, India. Elsewhere in the region, managed and hosted services have yet to take off in a big way, although countries such as Malaysia, Indonesia and Thailand offer good growth potential due to government-driven initiatives.

While the concept of outsourcing is not new to most businesses, more than 60 percent of companies in the region are still predominantly managing their IT operations in an insourcing model. This is especially true of companies in developing and more conservative markets such as China, Indonesia and the Philippines.

According to Tan, the innate fear of losing control over IT operations and compromising confidential business information has been the major factor inhibiting wider adoption of managed/hosted services. "This, together with the bad publicity of some outsourcing arrangements and the lack of strong customer references in some markets are some of the issues that managed SPs will need to address to drive uptake," he says.

As the market matures, growing competition and pricing pressures from system integrators/IT services companies and pure-play managed service providers can be expected. Hence, the need to innovate and go beyond the provision of low-cost infrastructure to deliver increased business value will be important differentiators for SPs.

Tan believes that large enterprises would increasingly embrace out-tasking and multi-sourcing more than complete outsourcing, while SMBs would prefer a hosted model.

The Strategic Analysis of Managed and Hosted Services Market Opportunities in Asia Pacific study is part of the Communication Services Growth Partnership Service program, which also includes research in the following markets: WAN services, enterprise mobility, IPTV, user generated content (UGC), social networking, online and mobile content, telecom services, and network transformation case studies. All research services included in subscriptions provide detailed market opportunities and industry trends that have been evaluated following extensive interviews with market participants. Analyst interviews are available to the press.

Frost & Sullivan, the Growth Partnership Company, partners with clients to accelerate their growth. The company's TEAM Research, Growth Consulting and Growth Team Membership empower clients to create a growth-focused culture that generates, evaluates and implements effective growth strategies. Frost & Sullivan employs over 45 years of experience in partnering with Global 1000 companies, emerging businesses and the investment community from more than 30 offices on six continents.

 
 
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Managed and Hosted Services on the Rise As Telcos Make A Play for the Outsourcing Game

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