& 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
The Google Fiber honcho's defection to Facebook signals a new phase in the relationship between web-scale Internet companies and communications service providers.
Fixed wireless access is back in fashion as a fast and efficient way to hook up customers in hard-to-reach places.
Virtualization is continuing to grow extraordinarily, and vendors are finding that hypervisors have a chance to shine, offering consolidation, safety and security.
Service providers are making some progress toward virtualizing networks and services -- but (surprise, surprise) the rate of progress isn't as fast as they expected.
As the cable industry is steadily deploying WiFi hotspots and homespots, it is beginning to explore other opportunities that wireless usage can offer.
Light Reading’s Upskill U is a FREE, interactive, online educational resource that delivers must-have education on themes that relate to the overall business transformation taking place in the communications industry.
NEXT COURSE
Wednesday, July 27, 1:00PM EDT
The Changing Face of the Data Center World
Rodney M. Elder, Senior Solutions Architect, Equinix
UPCOMING COURSE SCHEDULE
Wednesday, August 3, 1:00PM EDT
The Central Office Re-Architected as a Data Center
Guru Parulkar, Executive Director, Open Networking Research Center, Open Networking Lab
Wednesday, August 10, 1:00PM EDT
Telcos & Open Source 101
Phil Robb, Senior Technical Director, OpenDaylight
Friday, August 12, 1:00PM EDT
The Role of Open Source in NFV
Jim Fagan, Director, Cloud Practice, Telstra
in association with:
From The Founder
The more things change, the more they stay the same for Juniper's next-gen comms solutions, and that's a good thing.
Flash Poll
Live Streaming Video
Charting the CSP's Future
Six different communications service providers join to debate their visions of the future CSP, following a landmark presentation from AT&T on its massive virtualization efforts and a look back on where the telecom industry has been and where it's going from two industry veterans.
LRTV Custom TV
NetScout: Maximizing Enterprise Cloud for Digital Transformation

7|20|16   |   04:53   |   (0) comments


Light Reading Editor Mitch Wagner talks to NetScout CMO Jim McNiel about maximizing the benefits of enterprise cloud and digital transformation while minimizing potential pitfalls with a proper monitoring and instrumentation strategy.
Women in Comms Introduction Videos
Ciena's VP Offers a Career Crash Course

7|20|16   |   4:14   |   (0) comments


How did Ciena's Vice President of Sales, Angela Finn, carve out her career path? Simple, she tells WiC. She stayed true to her company, customers and principles. She shares her advice for women on how to be authentic and credible, as well as for companies that want to make a real change to their culture and practices.
LRTV Custom TV
NFV in 2016: Part 2 – Climbing the Virtualization Maturity Curve

7|19|16   |   06:56   |   (0) comments


Many of the initial use case implementations are single-vendor and self-contained. The industry is still climbing the virtualization maturity curve, needing further clarity and stability in the NFV infrastructure (NFVi) and greater availability and choice of virtualized network functions (VNFs). Interoperability between NFVis and VNFs from different vendors ...
Telecom Innovators Video Showcase
Versa Networks' Kumar Mehta on SD-WAN Managed Services

7|19|16   |     |   (0) comments


In Silicon Valley, Steve Saunders sits down with Versa's Kumar Mehta for an interview focused on why service providers are building SD-WAN managed services, and how Versa's telco customers are innovating.
LRTV Custom TV
Juniper Networks & The Evolution of NFV

7|19|16   |   06:01   |   (0) comments


Senior Juniper Networks executives talk to Light Reading Founder & CEO Steve Saunders about NFV developments and the recent independent evaluation by test lab EANTC of Juniper's Cloud CPE solution.
LRTV Interviews
CenturyLink Goes Beyond Managed WiFi

7|19|16   |     |   (0) comments


CenturyLink's managed WiFi allows enterprises, such as retailers and resorts, to track guest WiFi usage in order to help them better communicate with customers.
LRTV Interviews
AT&T Launches Network Functions on Demand

7|17|16   |   05:26   |   (0) comments


Roman Pacewicz, Senior Vice President, Offer Management & Service Integration, AT&T Business Solutions, discusses the operator's launch of its Network Functions on Demand service.
LRTV Interviews
Enterprise Pitch for Ciscosson

7|14|16   |   04:43   |   (0) comments


After seven months of near silence, Cisco and Ericsson executives publicly discussed details on their extensive partnership. Among the tidbits shared by Martin Zander, VP, group strategy programs, Ericsson, and Doug Webster, VP service provider marketing, Cisco: The partnership was initially launched to serve the service provider market, but is already gaining ...
Wagner’s Ring
Cisco Faces Up to Hypercloud Threat

7|13|16   |   02:42   |   (0) comments


Facebook, Amazon and Google mostly don't buy branded technology for their networks – they build their own. That's a threat to Cisco – and its competitors too – which face potentially dwindling demand for their product. Is Cisco up to the challenge? Light Reading went to the annual Cisco Live conference to find out.
LRTV Huawei Video Resource Center
Building a Better Connected Russia

7|13|16   |     |   (0) comments


At UBBS World Tour 2016, Alla Shabelnikova of Ovum shares the findings of a white paper outlining the challenges and opportunities of broadband rollout in Russia.
LRTV Huawei Video Resource Center
The Global Video Business

7|13|16   |     |   (0) comments


At UBBS World Tour 2016, Roger Feng of Huawei shares insights on the future of video business.
LRTV Huawei Video Resource Center
UBBS World Tour Moscow Highlights

7|13|16   |     |   (0) comments


At UBBS World Tour 2016 at Moscow, Huawei showcases its outstanding progress in video technology.
Upcoming Live Events
September 13-14, 2016, The Curtis Hotel, Denver, CO
September 27, 2016, Philadelphia, PA
November 3, 2016, The Montcalm Marble Arch, London
November 30, 2016, The Westin Times Square, New York City
December 6-8, 2016,
May 16-17, 2017, Austin Convention Center, Austin, TX
All Upcoming Live Events
Infographics
Five of the Top 10 most targeted countries in Check Point Software Technologies' global Malware & Threat Index for Q1 2016 are in Africa.
Hot Topics
SoftBank Muscles In on ARM in $32B Deal
Iain Morris, News Editor, 7/18/2016
Ericsson 'Doubles' Savings Goal as Sales Slump
Iain Morris, News Editor, 7/19/2016
Kevin Lo's Move to Facebook: Sign of Things to Come?
Patrick Donegan, Chief Analyst, Heavy Reading, 7/20/2016
Verizon's Next With VNFs
Carol Wilson, Editor-at-large, 7/21/2016
Facebook Gets Its Drone On
Ray Le Maistre, Editor-in-chief, 7/22/2016
Like Us on Facebook
Twitter Feed
BETWEEN THE CEOs - Executive Interviews
There's no question that, come 2020, 5G technology will turn the world's conception of what mobile networking is on its head. Within the world of 5G development, Dr. ...
I've enjoyed interviewing many interesting people since I rejoined Light Reading, but William A. "Bill" Owens certainly takes the biscuit, as we say where I come from.
Live Digital Audio

Our world has evolved through innovation from the Industrial Revolution of the 1740s to the information age, and it is now entering the Fourth Industrial Revolution, driven by technology. Technology is driving a paradigm shift in the way digital solutions deliver a connected world, changing the way we live, communicate and provide solutions. It can have a powerful impact on how we tackle some of the world’s most pressing problems. In this radio show, Caroline Dowling, President of Communications Infrastructure & Enterprise Computing at Flex, will join Women in Comms Director Sarah Thomas to discuss the impact technology has on society and how it can be a game-changer across the globe; improving lives and creating a smarter world. Dowling, a Cork, Ireland, native and graduate of Harvard Business School's Advanced Management Program, will also discuss her experience managing an international team focused on innovation in an age of high-speed change.