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Managed Services 3.0 : End Users Feeling the “-tion” Effect

July 8, 2008 - 1 Comment

For managed services providers, a combination of market forces for today’s end user businesses have combined to create a ‘tipping point’ that offer a new opportunity for a variety of providers to capitalize on the promise these services. These forces include changes in the business environment which are making customers more receptive to the idea of ‘out-tasking’ specific day-to-day responsibilities so they can focus on their core business and more strategic business initiatives. At the same time, advancements in remote network management technology are also making it possible for xSPs to deliver more robust managed services to a broader set of potential customers.A series of macro-market trends have combined to fundamentally change customer attitudes about managed services, and create a new opportunity for innovative MSPs to deliver differentiated solutions to their customers. Some of these can only be done by an xSP or at least done more efficiently.

  • Globalization and e-commerce have opened new opportunities for business expansion, and created new competitive pressures for companies of all sizes, but have created the need for global delivery of services.
  • Acceleration of new applications such as mobility has permitted workers to do their jobs anywhere, and created new challenges encouraging employee collaboration and protecting valuable data.
  • Escalation of application access, performance and reliability expectations of workers at all times from wherever they are.
  • Expectation of cost savings and improved efficiencies for IT delivered as a service.

Put together, these trends have opened the door to a new era in the evolution of the managed services market-’Managed Service 3.0′. (A big thanks to Jeff Kaplan and the THINKStrategies team for helping us with this framework and construct.) As companies respond to these challenges they are also attempting to improve their operating efficiencies even as they try to build greater customer intimacy. In response, many companies are seeking new mechanisms to better communicate, coordinate and collaborate with their customers, partners and remote workers. They are deciding how to maintain what is core versus context to their business.



These escalating demands are driving companies of all sizes to investigate a new generation of Internet Protocol (IP) based, unified communications capabilities. However, few companies possess the in-house skills and resources to successfully deploy and manage the latest networking technology. Even businesses which have traditionally invested in their in-house network skills and systems now question whether it makes sense for them to dedicate their limited internal resources on these infrastructure requirements when escalating customer and competition pressures are demanding they focus on more strategic initiatives. In response, these businesses are seeking a new level of technical support and networking expertise from their suppliers so they can better leverage technology to achieve their corporate objectives. They no longer want the burden of acquiring, deploying and managing the latest technology. Many businesses today would prefer to ‘out-task’ these responsibilities to a trusted partner who can proactively manage their day-to-day operations and provide valuable advice about how to fully leverage their technology to meet their business objectives. And, they are achieving bottom-line benefits.The value propositions driving them to consider and adopt managed services are,

  • Ability to adopt advanced technology rapidly
  • Freedom to focus on their core business
  • Improved network/application reliability, scalability and performance
  • Shifting financial impact from CapEx to OpEx
  • Greater cost predictability
  • Better risk management

These changing business needs have created a fresh opportunity for the xSP (telecommunications carriers, value-added resellers (VARs), systems integrators and others) to deliver a new generation of managed services that can differentiate them in the market by delivering greater value to their customers. The Cisco strategy is to enable the xSPs to deliver leading managed services through such effortrs as the Cisco Powered Program. And, in my next post, I’ll address these benefits.

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