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Managed Service 3.0 -The Market Opportunity Solution Providers Cannot Ignore

July 22, 2008 - 1 Comment

In prior posts, I’ve submitted for your consideration some thoughts as to why now is the time for managed services and how today’s end user community is primed like never before to adopt managed services.An important aspect to the Managed Services 3.0 migration is change. Telecom carriers, VARs, system integrators and other major players are each facing unprecedented market challenges:

  • Telecommunications carriers’ traditional wire-line services are experiencing a rapid shift in demand. Customer acquisition and retention for traditional telecom services has never been more difficult. Therefore, it is imperative for network service providers to create new ways to deliver differentiated and higher value services to their customers in order to achieve a more defensible position in the market.
  • Wireless service providers are seeking new ways to raise average revenue per user as the number of incremental new users plateaus in developed markets around the world.
  • VARs are also witnessing declining demand for their traditional services. Customers have grown impatient with extended deployment cycles and reactive support programs. They must develop a new value-proposition which enables them to become a trusted advisor, offering proactive support – rather than simply a technology supplier.
  • Systems integrators are also facing growing customer frustrations with extended projects which often fail to achieve their original business objectives. They must devise a method of establishing an ongoing relationship with their customers – rather than merely respond to finite projects.

Managed Services 3.0 can give all aspiring xSPs an opportunity to assume greater responsibility for their customers’ IT/network management requirements and establish a more strategic relationship with the most demanding business decision-makers.Rather than just supplying bandwidth and responding to RFP requests, savvy xSPs can proactively address their customers’ predictable business technology alignment needs, and thereby gain a competitive advantage.Most have a 360-degree awareness of their customers’ growing IT/network utilization patterns and forward-looking requirements. Given this backdrop, the goal is to use foresight to create a compelling and evolved user experience that’s truly distinctive – second to none, from the end-customer perspective.imageThere are ongoing dividends associated with that ultimate experience. Managed services represent a new and profitable annuity revenue source. Rather than rely on price-sensitive commodity services, isolated product procurements or transactional projects, xSPs can harness their continuous presence. However, in order to achieve these business benefits an xSP must have the right service delivery infrastructure, marketing skills, plus a sales and support operational model that’s appropriate for the task at hand.The market studies that I’ve highlighted state that we’re not quite there yet. Meaning, xSPs must apply the most suitable marketing and sales approach to move beyond the early adopters – beyond the converted enterprise CIOs, and into the uncertain terrain of the SMB market where most of the forward-looking”greenfield” opportunities reside.That said, Cisco has already offered tools, like customizable marketing and sales kits. The introduction of a series of programs, tools and marketing/sales resources designed to enable xSPs and to scale into new segments such as the vast SMB landscape.We believe that by working together we can actively help enable the migration, as xSPs to make “three” the magic number for stimulating momentum that fuels their managed services market development.

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  1. Interesting article Al, thanks for sharing your insight. I agree and feel the paradigm is shifting from users going to their technology and having their technology follow them around instead.