IDC CEMA Telecommunications Newsletter October 2008
 
IDC CEMA (Central & Eastern Europe and Middle East & Africa)
http://www.idc-cema.com/
 
 
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CEMA Carriers in the Managed Services Marketplace

Andy Hicks , Senior Research Analyst, Telecommunications, IDC CEMA

IDC's CEMA Telecoms practice is currently preparing a series of studies on network managed services as a product line for telecommunications providers.  The managed services arena is currently in a land grab phase as service providers, systems integrators, outsourcing companies, and equipment vendors all try to grab pieces of this developing but potentially lucrative market category.  Since most definitions of managed services are broad and still somewhat fuzzy, many types of businesses can claim that they are best suited to providing them. 

Telecom service providers have some advantages in the race.  Most fundamentally, they are experts on the network, with deep expertise in scalability, reliability, and quality of service.  Service providers also have a broad base of enterprise client relationships they can mine for opportunities to sell value-added services.

On the other hand, our surveys generally indicate that telcos do not have a strong reputation for IT expertise:  while IT managers are likely to turn to them first for connectivity and communications services, they are more likely to turn to systems integrators and other IT services firms in areas such as business continuity, datacenter management, and security.  Even as many of the larger carriers add IT services divisions in an effort to boost their margins and improve their service mix, their prospective customers at enterprises large and small still do not instinctively look to telcos when they consider outsourcing their core technology.  Such managers tend believe that IT services firms possess superior technical expertise, provide better customer service, are better able to customize solutions, and likely have more experience in managed services.

To capture a greater share of the managed services pie, service providers should acquire solid technical experience, be it by building a services unit from scratch, by purchasing a smaller shop, or by partnering with a systems integrator.  They should always remember to emphasize their mastery of connectivity and continuity, and their large customer base.  Building on managed connectivity services, telecommunications service providers can grow their IT capabilities to become major managed services providers in the next five years.

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IDC offers data-backed strategic advice for service providers operating in CEE and MEA through its Central and Eastern European and Middle East and African Carrier Transformation Strategies series and through customized research and consulting engagements. For more information, please contact Tatiana Hinova (thinova@idc.com; +420 221 423 140) or John Gole (jgole@idc.com; +420 221 423 140.)

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