& cplSiteName &

Network Managed Services Deals Stay Big

Heavy Lifting Analyst Notes
Heavy Lifting Analyst Notes
Heavy Lifting Analyst Notes
9/5/2012
50%
50%

One of the curious facts about the rise in the use of outsourcing and managed services by telcos and service providers over the last three years has been that the size and scope of the deals signed that involve network outsourcing is staying big (and in some cases getting bigger) while the deals for business process and IT outsourcing are staying small (or getting smaller).

To a certain extent this is accounted for by the network equipment providers – which win the vast bulk of the network outsourcing contracts – succeeding in extending the scope of their offerings as they push up from the network into the IT application domain. Moving from offering managed network operations centers (NOCs) to managed service operations centers (SOCs), which network equipment providers are now doing, inevitably involves running more equipment and applications from a single location.

Such deals are also seen as more strategic by both parties, with sharing of risk and benefits over long-term arrangements that can flex to accommodate market change. A focus on higher-level business outcomes means the managed network service provider may be given more levers to pull to achieve the benefits.

Also, in several regions of the world, the use of network managed service and outsourcing is growing: The early contracts tend to involve limited use of field operations outsourcing, as operators "dip a toe in the water" to see if outsourcing works for them. Such operators then tend to increase the scope of outsourced network operations next time – for instance, to outsource the running of the NOC. Operators in Europe, China and Latin America are among those that are following this pattern.

So if the network managed services deals are staying big, why are IT and business process outsourcing contracts not doing the same? Well, the era of the "megadeal" for IT infrastructure and applications has probably never really existed outside a few well-publicized examples such as deals between IBM Corp. (NYSE: IBM) and Bharti Airtel Ltd. (Mumbai: BHARTIARTL). And while operators' networks increasingly converge to support multiple services, many IT systems still tend be arranged in a more vertical fashion, with stacks supporting specific services, applications and solutions. Notable recent examples include managed mobility solutions and enterprise cloud services: In such cases, "standalone" managed services can be delivered effectively by an IT service provider independently of other IT stacks. While operators see the cost benefits of outsourcing more alongside their network, when it comes to IT systems they are more likely to look for outside help to solve specific problems or to introduce discrete new revenue-generating services, rather than handing over all the IT to a single managed service provider.

The latest Heavy Reading Insider, "Managed Services for Telcos: Progress & Pain Points," examines the market for the provision of managed network, IT and service operations. It looks at the drivers of outsourcing and managed service use by operators, comparing them by region and by type of operator and identifying how they have changed. The report also looks at how the nature of managed services engagements and the measures of success are changing in response to these changing drivers. It identifies the different types of service providers, which parts of the market they can participate in, and how they differentiate themselves. Finally, it profiles the key providers whose services encompass management of multi-vendor networks and IT infrastructures.

— Danny Dicks, Analyst, Heavy Reading Insider


Managed Services for Telcos: Progress & Pain Points, a 30-page report, is available as part of an annual subscription (12 monthly issues) to Heavy Reading Insider, priced at $1,595. This report is available for $900. To subscribe, please visit: www.heavyreading.com/insider.

(0)  | 
Comment  | 
Print  | 
Newest First  |  Oldest First  |  Threaded View        ADD A COMMENT
More Blogs from Heavy Lifting Analyst Notes
Scalable, flexible Internet of Things (IoT) platforms will be used in industrial enterprises to link remote and siloed M2M installations to leverage the power of the cloud.
Netcom's demonstration of 1Gbit/s data rates using LTE-Advanced Pro is a major victory in the ramp-up to 5G.
The momentum behind 'open' everything is real and growing, and will be a significant component of operators' development activities on their march toward the cloud.
The growth of EE is an interesting case study in quality-oriented branding in the mobile broadband era.
Cable has grown dramatically in the small- and midsized business (SMB) market, hitting the $12 billion mark, and is now heading into the enterprise business market.
From The Founder
Light Reading sits down at CES with the head of Cisco's service provider video business, Conrad Clemson, to discuss how NFV and cloud security relate to video, the challenge of managing 4K/8K traffic, the global expansion of Netflix and virtual reality.
Flash Poll
Live Streaming Video
CLOUD / MANAGED SERVICES: Prepping Ethernet for the Cloud
Moderator: Ray LeMaistre Panelists: Jeremy Bye, Leonard Sheahan
LRTV Huawei Video Resource Center
TeliaSonera: Striving for Independence

2|12|16   |     |   (0) comments


Peter Lagergren discusses the importance of decoupling the network from services.
LRTV Huawei Video Resource Center
Ken Wang on U-vMOS

2|12|16   |     |   (0) comments


Ken Wang discusses how video will take of the traffic on carrier networks and become a basic service to provide to end users.
LRTV Documentaries
All Change in Video

2|11|16   |   33:12   |   (1) comment


At this moderated panel at 2020 Vision in Dublin, Alan Breznick, Cable/Video Practice Leader of Light Reading, sits down with Jeff Finkelstein, director of network architecture at Cox Communications, to discuss the rapidly changing video market.
LRTV Custom TV
Hosting in Ireland, Past & Present

2|10|16   |   16:07   |   (0) comments


Garry Connolly, president of Host in Ireland, presents the keynote at Light Reading's 2020 Vision Executive Summit in Dublin.
Women in Comms Introduction Videos
What's Hot in Mobile Commerce?

2|10|16   |   12:18   |   (1) comment


Claire Maslen, financial services relationship manager at the GSMA, talks about the development of the digital commerce sector and the types of relationships that mobile operators are developing to further their m-commerce strategies.
LRTV Documentaries
EANTC Tests Nokia IP Routing & Mobile Gateway VNFs for Real World Deployment

2|9|16   |   5:08   |   (1) comment


Nokia obtained validation of its virtualized router and virtualized mobile gateway capabilities through rigorous testing performed by EANTC. The results set a new industry benchmark for outstanding performance, scalability, resiliency and manageability. Nokia VNFs are ready for telco cloud deployment, so that service providers can accelerate mobile, business and ...
Between the CEOs
CEO Chat With Level 3's Jack Waters

2|8|16   |   26:15   |   (1) comment


Light Reading CEO and founder Steve Saunders sits down with Level 3 Communications' CTO Jack Waters to discuss hot topics like virtualization, 4K and the future of telecom...
LRTV Custom TV
The Composable Telco

2|8|16   |   24:46   |   (0) comments


Heavy Reading's Principal Analyst Caroline Chappell presents the keynote at Light Reading's 2020 Vision Executive Summit in Dublin.
LRTV Custom TV
Join Us at the Digital Operations Transformation Summit

2|4|16   |   03:52   |   (0) comments


The Digital Operations Transformation Summit on February 21, 2016 at the Crowne Plaza Barcelona Fira Centre will bring together 50 senior executives to engage in a unique debate on the opportunities and challenges presented by the transformative evolving digital landscape. RSVP now at events@lightreading.com.
LRTV Custom TV
Making the Test: ADVA Ensemble Connector vs. Open vSwitch

2|4|16   |   01:28   |   (0) comments


Light Reading, in partnership with EANTC, recently tested ADVA's Ensemble Connector, which replaces open vSwitch and offers carrier-grade capability and interoperability. The test results strengthen ADVA's credibility as a provider in the virtualization space.
LRTV Custom TV
Bridging the Gap Between PoCs & Deployment in NFV

2|4|16   |   31:50   |   (0) comments


Charlie Ashton of Wind River presents the keynote at Light Reading's 2020 Vision executive summit in Dublin.
Between the CEOs
CEO Chat With Mike Aquino

2|3|16   |   17:34   |   (0) comments


The former CEO of Overture Networks, Mike Aquino, discusses why truly open virtualization solutions provide service providers with the greatest choice.
Upcoming Live Events
March 10, 2016, The Cable Center, Denver, CO
April 5, 2016, The Ritz Carlton, Charlotte, NC
May 23, 2016, Austin, TX
May 24-25, 2016, Austin Convention Center, Austin, TX
All Upcoming Live Events
Hot Topics
Yahoo & Verizon Sitting in a Tree...
Brian Santo, Senior editor, Test & Measurement / Components, Light Reading, 2/8/2016
AT&T Lights Fire Under 5G, Plans 2016 Trials
Iain Morris, News Editor, 2/12/2016
Vodafone: Flexible Work Policies Boost Profits
Sarah Thomas, Editorial Operations Director, 2/8/2016
It's Time to Integrate OTT Video
Alan Breznick, Cable/Video Practice Leader, 2/8/2016
Andreessen Facepalms on Facebook Free Basics
Mitch Wagner, West Coast Bureau Chief, Light Reading, 2/10/2016
Like Us on Facebook
Twitter Feed
Webinar Archive
BETWEEN THE CEOs - Executive Interviews
Light Reading CEO and founder Steve Saunders sits down with Level 3 Communications' CTO Jack Waters to discuss hot topics like virtualization, 4K and the future of telecom...
The former CEO of Overture Networks, Mike Aquino, discusses why truly open virtualization solutions provide service providers with the greatest choice.
Live Digital Audio

Broadband speeds are ramping up across Europe as the continent, at its own pace, follows North America towards a gigabit society. But there are many steps to take on the road to gigabit broadband availability and a number of technology options that can meet the various requirements of Europe’s high-speed fixed broadband network operators. During this radio show we will look at some of the catalysts for broadband network investments and examine the menu of technology options on offer, including vectoring and G.fast for copper plant evolution and the various deployment possibilities for FTTH/B.