Managed Services Leads Economic Recovery

June 10, 2010 - 0 Comments

The recession of 2009 has completely changed how businesses view and consume information technology once and for all. Companies looking to thrive in the near and long term have had to take a hard look and cut costs while keeping their competitive advantage intact. Businesses locked down spending to core competencies and looked for ways to outsource non-core attributes of the business. As a result, the adoption of Managed and Cloud Services as a way of meeting IT needs has skyrocketed.

Cisco recently commissioned Forrester to perform a worldwide detailed study on this trend. In its findings released today, Forrester found that the Global Managed and Cloud Services Market is expected to reach $217 Billion by 2014. Pegged to grow at 15% CAGR from 2009-2014, this is about twice the rate of the overall IT industry growth overall, as we come out of the recession. But why this sudden increase in growth?

There are multiple factors at play:

  • Rapid technology and regulatory changes
  • Increased technology complexity
  • Cost efficiencies gained by moving from a CapEx to an OpEx cost model
  • Awareness and acceptance by enterprises and SMB’s

Whilst the economic downturn acted as a catalyst for managed and cloud services it also seems to have fundamentally changed IT buying behaviors. So, as the economy begins it recovery, we will continue to see strong adoption of these new consumption and delivery models.

Concerns surrounding security, reliability and performance of managed services still exist, though diminishing with time. Network owning Service Providers will find themselves in a unique position to resolve these concerns. Trust gained to-date along with pre-existing footprint in the customer premise gives them the ability to offer solutions that span all of these ‘places in the network.’

The study released today also provides detailed insights into the Collaboration, IP Telephony, Data Center, Metro Ethernet, IP VPN and Security markets on global, regional and country-wide basis across 32 countries. Managed Service Providers will certainly find the information insightful as they look to building-out their managed services portfolio.

Please, contact your Cisco Sales representative to obtain the content of this study.

You may also view the replay of the Cisco and Verizon Customer Webcast – Managed and Cloud Services: Opportunities in a Transitioning Market, a discussion conducted by Join Ellen Daley, Forrester Research vice president; Will Scott, Cisco global director of managed solutions; and Joseph Crawford, Verizon Business executive director of IT solutions.

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