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Telco Managed Services Opportunities

We all know the global economy is in the tank. Everyone – personally and professionally – is cutting expenses. Can this situation actually be an opportunity knocking on the telcos' doors? Will cost saving initiatives encourage corporations to consider telcos as resources for managed services? There's a compelling case for telcos' approach to managed services.

Telcos approach managed services from a different direction than their IT competitors. Building from their fundamental expertise, telcos approach the world of information and communications technology (ICT) from their communications heritage. With multinational corporations looking to optimize IT performance at as low a cost as possible, telcos have the expertise necessary to help link enterprise resources to each other as well as to host and manage the applications in a globally consistent manner.

As carriers prepared to bring next-generation services to market, they recognized the need to built processing-centric nodes throughout their networks. Carriers use these facilities not just to manage their own ICT needs, but use them to provide hosting, collocation, content distribution, and other IT focused applications. Over the last few years, most of the major carriers have acquired or built professional services groups. At some of the carrier organizations – e.g., AT&T Inc. (NYSE: T), KT Corp. , Telia Company – these groups report into and are functionally integrated with the divisions that provide business services. That set up enables carriers to provide enterprise customers with "virtualized" ICT services on a consistent and global basis.

Additionally, the first functional enterprise-aimed next generation services provide hybrid PBX applications – e.g., BT Group plc (NYSE: BT; London: BTA), Salt SA , Verizon Communications Inc. (NYSE: VZ). In this way, an enterprise can leverage telcos' network-resident processing to extend its PBX functions to employees all around the world. Mobile callers can access their enterprise PBX functions through their wireless phones to make voice and data calls just as they would in the office. The services also support wireless to wired phone handoffs. Enterprises looking to carriers to facilitate global PBX functions as well as distributed applications management will find the carriers equally well equipped to provide both capabilities.

Enterprise managers that exploit telcos' network-resident platforms may be able to increase their ICT capabilities, better manage their expenses and provide global applications access to their users.

Over the next few years, telcos will continue to invest in IT hardware and software capacity to meet and increase customer demand. That creates a growth opportunity for traditional and emerging platform suppliers.

— H. Paris Burstyn, Senior Analyst, Heavy Reading

wscott26 12/5/2012 | 3:36:05 PM
re: Telco Managed Services Opportunities Great Article

I am with Cisco and we invest heavily in helping our Telco partners develop their Managed Services strategy and specifically help them design, build and sell profitable managed services portfolios.

Great post - I agree with your points but would go one further. I would suggest that telcos, because of their infrastructure and their expertise of delivering services to very large markets are uniquely positioned to address the managed services needs of the SMB market.

In addition as we see Web 2.0 technologies becoming more and more integrated with the network and sensitive to network conditions then the telco, owning the network, is best placed to deliver managed services based on these Web 2.0 technologies delivering the experiences that enterprise demands. A great example of this is the recent announcement of the Cisco Telepresence Managed Services from AT&T.

However - I don't think this means that the SIs and the VARs have no look in. A large number of small deals from the SMB market will require a low cost, broad distribution model. Telcos who look to pursue the SMB segment will need broad
sales channels to address what will still be a relatively complex sales cycle and delivery parters that can fulfill the customer premise portion of the solution - and we see that it is this nuance that will bring the Telco and the VAR together to drive the really successful Managed Service Portfolio

Will Scott
[email protected]
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