& 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
Demand calls for another optical transport evolution, this time in the management of optical network resources.
Whether building out distributed RANs or new centralized RANs, BBU emulation is a critical step of the process to help mobile operators avoid lengthy and costly delays.
During the "Getting to 'Cloud Native' " panel at our NFV & Carrier SDN event, we will debate what it will take to enable telcos to execute their cloud transformations, and what the supplier community's responsibilities are in the process.
To succeed in the enterprise market telcos need to play to their strengths.
Fiber is making a comeback and converged access infrastructure is helping to push the market collectively towards 5G and other services.
Featured Video
From The Founder
The 'gleaming city on a hill,' Steve Saunders calls it. But who is going to take us from today's NFV componentry to the grand future of a self-driving network? Here's a look at the vendors hoping to make it happen.
Flash Poll
Upcoming Live Events
September 28, 2017, Denver, CO
October 18, 2017, Colorado Convention Center - Denver, CO
November 1, 2017, The Royal Garden Hotel
November 1, 2017, The Montcalm Marble Arch
November 2, 2017, 8 Northumberland Avenue, London, UK
November 2, 2017, 8 Northumberland Avenue – London
November 10, 2017, The Westin Times Square, New York, NY
November 30, 2017, The Westin Times Square
All Upcoming Live Events
Infographics
With the mobile ecosystem becoming increasingly vulnerable to security threats, AdaptiveMobile has laid out some of the key considerations for the wireless community.
Hot Topics
Can Fixed Wireless Fix Rural Broadband?
Mari Silbey, Senior Editor, Cable/Video, 9/25/2017
Could 5G Have Found Its Glass Ceiling?
Dan Jones, Mobile Editor, 9/20/2017
Why Amazon May Be Cable's Biggest Threat
Mari Silbey, Senior Editor, Cable/Video, 9/22/2017
1 Million Pirate Set-Top Boxes Sold in the UK
Aditya Kishore, Practice Leader, Video Transformation, Telco Transformation, 9/20/2017
Comcast Shuts Down OTT Again
Mari Silbey, Senior Editor, Cable/Video, 9/19/2017
Animals with Phones
Dog Training for the Important Stuff Click Here
We're done with "Fetch" and "Sit." How about "Spreadsheet!"?
Live Digital Audio

Understanding the full experience of women in technology requires starting at the collegiate level (or sooner) and studying the technologies women are involved with, company cultures they're part of and personal experiences of individuals.

During this WiC radio show, we will talk with Nicole Engelbert, the director of Research & Analysis for Ovum Technology and a 23-year telecom industry veteran, about her experiences and perspectives on women in tech. Engelbert covers infrastructure, applications and industries for Ovum, but she is also involved in the research firm's higher education team and has helped colleges and universities globally leverage technology as a strategy for improving recruitment, retention and graduation performance.

She will share her unique insight into the collegiate level, where women pursuing engineering and STEM-related degrees is dwindling. Engelbert will also reveal new, original Ovum research on the topics of artificial intelligence, the Internet of Things, security and augmented reality, as well as discuss what each of those technologies might mean for women in our field. As always, we'll also leave plenty of time to answer all your questions live on the air and chat board.

Like Us on Facebook
Twitter Feed