Gorilla in the Managed Services Market
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It’s not often the little guy gets the advantage, but in the case of
managed services revenues, small businesses, which have been the
“little guy” in the market, now have the edge. Worldwide, service
providers are reporting decreases in all segments, on average, of
-13.72% in their managed services revenues. But there is one segment
that is the exception: small business managed services, which is
proving to be the revenue gorilla in an otherwise depressed market.
Small
businesses continue to see the economic benefits of outsourcing their
IT, especially as many of them are directly affected by the credit
crunch and are unable to secure financing for general operations and/or
purchase of network equipment. Savvy service providers that anticipated
this trend are now reaping the benefits. Small Office Managed WAN (CPE)
Router Services increased 55.86%, sequentially, in Q1 2009.
As
the costs associated with network complexity, metro Ethernet, IP VPNs,
managed IP voice and IP security consume more of their IT budgets, SMBs
recognize that outsourcing their network management to service
providers is one way to improve their success and bottom line, avoid
and manage risk, and improve their overall operational efficiency. For
service providers, this recognition translates to new sources of
revenues, that is, as long as they can address SMBs’ specific
operational requirements, such as integration of software applications,
data center consolidation, integration of other operational platforms,
managed hosting, and managed network solutions, especially in the
rapidly expanding areas of managed voice and security.
Verticals
within the small business market also offer SPs another source of
market share growth. Smaller banking and financial services
institutions, manufacturing, telecommunications, and retail businesses
are increasingly outsourcing their telecom services to lower their
capital expenditures.
With competition eroding SPs’ profits,
many are now looking to small businesses to grow their revenue and
market share. Service providers are revising their business models to
identify and target SMB market opportunities and designing strategies
that deliver best-practices for services and products that address
their specific requirements. With small businesses accounting for more
than 50% of gross domestic product worldwide, capturing a piece of this
“little guy” revenue share isn’t monkey business.
Tags: Ray Mota Manage Service SMB Small Office CPE Routers
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