Light Reading
Telecom network operators still want their technology suppliers to provide managed services

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
More Blogs from Heavy Lifting Analyst Notes
Network functions virtualization is the key catalyst underpinning telco data center transformation, believes Nokia Networks.
The growth of the smartphone market is creating a new testing ground for vendors that must find a way to keep ahead of the game.
As more and more applications move into the cloud, enterprises must ensure that those clouds are rigorously tested for performance.
As LTE-Advanced networks begin to reach commercial deployment, technology suppliers are scrambling to establish market leadership positions.
Cable has been working on WiFi gateways to combine IP video and advanced Wi-Fi for the home.
Flash Poll
Wagner’s Ring
Data Centers Drive Telcos Into the Future

8|28|14   |   2:20   |   (2) comments


Data centers are at the heart of key trends driving telecom -- network virtualization, the drive for increased agility, and the need to compete with OTT providers.
LRTV Custom TV
Why SPs Should Consider Cisco's EPN

8|27|14   |   5:40   |   (0) comments


Sultan Dawood from Cisco discusses Cisco's EPN, which enables SPs to build agile and programmable networks delivering new network virtualized services using Cisco's Evolved Services Platform (ESP).
LRTV Huawei Video Resource Center
Huawei’s Showcase @ Big Telecom Event 2014

8|26|14   |   2.56   |   (0) comments


SoftCOM is Huawei's framework for telecom business and network transformation. Haofei Liu, Solution Marketing Manager, Carrier Business Group, Huawei, showcases Huawei's SoftCOM architecture in this video.
LRTV Huawei Video Resource Center
Huawei @ BTE 2014: Director of Integrated Solutions on SoftCOM & NFV Monetization

8|26|14   |   4.43   |   (0) comments


Libin Dai, Director of Integrated Solutions, Carrier Business Group, discusses Huawei's SoftCOM and NFV monetization. Huawei believes that NFV monetization should be service-driven rather than network-driven, and that operators should have network transformation, service transformation and a compatible and collaborative ecosystem in place in order to deploy NFV.
LRTV Huawei Video Resource Center
Huawei @ BTE 2014: Director of US NFV Lab on CloudEdge & the Future of NFV

8|26|14   |   4.06   |   (0) comments


Sean Chen, Director of US NFV Lab at Huawei, discusses Huawei's new approach to NFV in open collaboration. Huawei believes that through Proof of Concept tests, it could help operators learn and communicate with the industry more effectively. Sean believes that successful implementation of NFV should have its values reaching to end users and discusses how Huawei's ...
LRTV Huawei Video Resource Center
Huawei's Highlights @ Big Telecom Event 2014

8|26|14   |   3.34   |   (0) comments


At the Big Telecom Event in Chicago Huawei showcases its high-level strategy, the SoftCOM architecture, which helps operators reduce the cost of ownership of their network infrastructure and generate additional revenue in the ICT service environment. Huawei showcases over 30 pilot programs from across the globe, focusing on the industry-leading commercial ...
LRTV Custom TV
VeEX – Live from the Show

8|21|14   |   5:58   |   (0) comments


An overview of VeEX Test and Measurement solutions including TX300S multi-service test set with VeExpress cloud-based management system, UX400 universal modular platform supporting 100G testing, and the redesigned RXT modular platform.
LRTV Custom TV
Transitioning CE 2.0 Networks Into the SDN & NFV Era With Telco Systems

8|19|14   |   5:19   |   (0) comments


Telco Systems' Ariel Efrati (CEO) and Moshe Shimon (VP of Product Management) discuss virtualization and how the company's new Open Metro Edge solution utilizes the SDN and NFV concepts to accelerate and orchestrate service delivery through its innovative product portfolio and software applications.
LRTV Custom TV
NFV Myths: Is NFV Still Several Years Away?

8|11|14   |   1:13   |   (0) comments


Some say that NFV (network functions virtualization) is still several years away from being implemented on mobile operator networks. This isn't the case. Operators can get started on their paths to NFV now, as this short video from Skyfire shows.
LRTV Custom TV
A New Security Paradigm in SDN/NFV

7|28|14   |   02:54   |   (0) comments


Paul Shaneck, Global Director Network Solutions for Symantec, discusses the evolving virtualized network, explaining how Symantec is leading the security discussion as it relates to SDN and NFV, and helping to ensure the network is protected and compliant.
LRTV Documentaries
Sprint's Network Evolution

7|24|14   |   14:59   |   (0) comments


Sprint's Jay Bluhm gives a keynote speech at the Big Telecom Event (BTE) about Sprint's network and services evolution strategy, including Spark.
LRTV Documentaries
BTE Keynote: The Software-Defined Operator

7|24|14   |   18:43   |   (1) comment


Deutsche Telekom's Axel Clauberg explains the concept of the software-defined operator to the Big Telecom Event (BTE) crowd.
Upcoming Live Events!!
September 16, 2014, Santa Clara, CA
September 16, 2014, Santa Clara, CA
September 23, 2014, Denver, CO
October 29, 2014, New York City
November 6, 2014, Santa Clara
November 11, 2014, Atlanta, GA
December 9-10, 2014, Reykjavik, Iceland
June 9-10, 2015, Chicago, IL
Infographics
A survey conducted by Vasona Networks suggests that 72% of mobile users expect good performance all the time, and they'll blame the network operator when it's not up to par.
Hot Topics
Rogers, Shaw Take Aim at Netflix
Mari Silbey, Independent Technology Editor, 8/26/2014
Utilities to Pump $11.2B Into Smart Grid – Study
Jason Meyers, Senior Editor, Utility Communications/IoT, 8/26/2014
Verizon Launches QR Code Security Solution
Carol Wilson, Editor-at-large, 8/26/2014
Fiber Revival at Deutsche Telekom
Iain Morris, 8/25/2014
M2M's In Fashion: Wearables Play the US Open
Sarah Reedy, Senior Editor, 8/25/2014
Like Us on Facebook
Twitter Feed