Managed services are services that are deployed by an enterprise to manage its IT infrastructure. Managed services have gone mainstream as enterprises are not able to manage their growing IT infrastructure and require specialist so enterprises can focus on their core competencies without having to worry about IT infrastructure. These services enable enterprises to focus on their core competencies by reducing the load of maintaining and managing their IT functions such as network management, IT infrastructure, communication and collaboration, security, and data centers. Furthermore, managed services allow enterprises to transfer their Capital Expenditure (CAPEX) to Operational Expenditure (OPEX).
25 companies offering Managed Services were analyzed, shortlisted and categorized on a quadrant under Visionary Leaders, Innovators, Dynamic Differentiators, and Emerging Companies to identified best Managed Services providers.
IBM, Cisco, Accenture, Fujitsu, Huawei, Atos, Tata Consultancy Services, HCL, and Wipro have been identified as visionary leaders as they have established product portfolios and a robust market presence and business strategy. These companies are best Managed Services providers.
Dimension Data, Dataprise, Netmagic (An NTT Communications Company), and Allstream have been identified as innovators as these vendors have a very focused product portfolio. However, they do not have very strong growth strategies for their overall business.
Sirius Computer Solutions, OneNeck IT Solutions, Onepath, Calance, and Melbourne IT have been identified as emerging companies. They do not have very strong business strategies as compared to other established vendors. They might be new entrants and require some more time before gaining significant traction in the market. Nokia Networks, AT&T, Ericsson, GTT Communications, Unisys, DXC Technology, and Subex have been recognized as dynamic differentiators.The competitive leadership mapping (Quadrant) showcased below provides information for 25 major players offering Managed Services. Vendor evaluations are based on two broad categories: product offering and business strategy. Each category carries various criteria, based on which vendors have been evaluated. The evaluation criteria considered under product offerings include breadth of offering, delivery (based on industries that the vendors cater to, deployment models, and subscriptions), features/functionality, delivery, product quality and reliability, and product differentiation. The evaluation criteria considered under business strategy include geographic footprint (on the basis of geographic presence), channel strategy and fit, vision alignment, and effectiveness of growth (on the basis of innovations, partnerships, collaborations, and acquisitions).
Visionary Leaders generally receive high scores for most evaluation criteria. They have a strong portfolio of managed services. IBM, Cisco, Accenture, Fujitsu, Huawei, Atos, Tata Consultancy Services, HCL, and Wipro are the leading players in the managed services market and are recognized as leaders. These vendors are making their presence felt by offering services that are required by most organizations. They have a robust business strategy to achieve continued growth in the market.
Dynamic Differentiators have a strong business strategy with an extensive channel network and reach. Over the years, the dynamic vendors have been consistently generating positive revenue growth in the managed services market with their service offerings. Moreover, their market position is enhanced by organic and inorganic strategies undertaken by them over the period. Nokia Networks, AT&T, Ericsson, GTT Communications, Unisys, DXC Technology, and Subex are recognized as dynamic differentiators.
Innovators demonstrate substantial product innovation as compared to their competitors. They have a wide portfolio of managed services and the potential to build strong business strategies for their business growth to be at par with the leaders. Dimension Data, Dataprise, Netmagic (An NTT Communications Company), and Allstream are recognized as innovators. These vendors have been providing managed services as per their customer demands. Innovators have been at the forefront in deploying their services based on the clients’ custom software requirements for the niche market.
Sirius Computer Solutions, OneNeck IT Solutions, Onepath, Calance, and Melbourne IT are recognized as emerging players in the managed services market. The emerging players are specialized in offering highly niche and tailor-made solutions and services to their clients. These companies enable enterprises to not only build and manage content-driven processes but also support new ways of working to drive business results.
Managed Services - Market Scope
Managed Services has a wide range of functions and coverage across multiple industries. A managed Service Partner (MSP) takes on complete responsibility of an IT infrastructure such as equipment, slowness, outage issues, etc. without impacting core operations. Due to this advantage Managed Services has gain popularity among various sectors.
Managed Services are deployed in the below ways –
- Network Service – An enterprise can outsource the management of its network service. The MSP handles the complete provisioning of the network infrastructure and internet access. They also manage VPN, data storage and continuously monitor the network to ensure smooth operations.
- Communication and Collaboration Services – All enterprises drive more value by focusing on their core product. In certain industries such as a telecom sector, to bring about innovation in their product offering it makes more sense for them to outsource their communication and customer engagement services. An MSP in such a case would be responsible for the management of Email Services, VoIP and Unified Communication.
- Data Center Service – In today’s technology-driven world, data is of utmost importance. Organizations store large amounts of data in servers. An enterprise can outsource their server, storage, and backup management to ensure the business is focusing on growth and development.
- IT Infrastructure Service – In certain cases, an enterprise will outsource its entire IT Infrastructure such as its technical support and maintenance, print services, backup and disaster recovery services, hereby increasing the efficiency of the enterprise.
- Mobility Services – An MSP is sometimes tasked with managing the performance of an application or device. They are responsible for the smooth running of the application or device.
- Information Service – Information is required by all organizations to conduct their business. Keeping track and managing all this information is a tedious task. An MSP can help in managing the business processes, operating system services (OSS) and business system services (BSS) for an organization.
- Security Service – An MPS manages the firewall, IDS, IPS, UTM, vulnerability management, compliance management, distributed denial of service (DDoS), SIEM, IAM, and antivirus or antimalware systems under security services.
Managed Service is also deployed based on the vertical of the organization such as Media and Entertainment, BFSI, Consumer goods and Retail, Manufacturing, Healthcare and Life Sciences, Education, Telecom and IT, Energy and Utilities and Government and Public; the deployment type necessary such as on-premises and cloud; by organization size – SME’s and large enterprises and by region – North America, Europe, APAC, MEA and Latin America.
Managed Services - Major Services
Firewall security forms the first line of defense to protect data, critical assets, and networks from potential attacks. A firewall prevents unauthorized attacks and helps ensure network security. Managed firewall services include real-time monitoring and reporting to help enterprises comply with security.
Vulnerability Management is the repetitive routine of recognizing, grouping, remediating and removing vulnerabilities, particularly in the network and firmware. Vulnerability Management can be deployed by cloud management which gives consistent and global visibility of an organization’s IT framework.
Intrusion Prevention System (IPS)
Managed IPS monitor and protect networks from data flows with malicious intent. It gives an idea on the organization’s security actions with reports and dashboards that allow efficient administrative control.
Antivirus tools detect and remove unnecessary computing scripts, viruses, and malware from systems. Modern antivirus tools can protect systems from various browser threats, key loggers, fraud tools, adware and spyware, and phishing attacks.
A VPN creates a secure tunnel for remote users and different branch offices of an enterprise to access data files in a secure manner. Managed VPN’s help remotely situated organizations to stay connected with their business units seamlessly through secure tunneling from a centralized server.
Data storage works as a centralized database that a large number of users can access without latency. The advantages of data storage include improved performance, reliability, and accessibility.
Managed Unified Communication
Managed unified communication includes managing the integration of various real-time enterprise communication services such as instant messaging, presence information, voice, mobility features, audio, video and web conferencing, desktop sharing, data sharing, call control and speech recognition. Managed unified communication via outsourcing increases network efficiency, optimizes customer services, supports growth initiatives and cuts OPEX.
Server management services offered by managed data center providers include the management of converged infrastructure, virtualization hypervisor, physical servers, and OS. They ensure the smooth functioning of data centers thus increasing the uptime and adding value to the business.
Frequently Asked Questions
Which is the major driver of Managed Services market and what is the restraint faced?Driver: Increasing trend of cloud analytics and big data As the business requirements are dynamic, customers are looking for new solutions and services that can be implemented in today’s continuous changing technology. As solutions are increasing in different markets, the requirement for services has equally become important. It can be anticipated that gen-next integrated ICT services that include a vast range of professional and integrated services, is expected to grow to meet the increasing demand from businesses operating in analytics, big data, IoT, and infrastructure management. Now, with the upcoming technologies available for analyzing resources stored in the cloud, companies are taking advantage of the increased scalability and lower overhead, directing the shift from physical machines to cloud-based big data solutions. Moreover, the rising global trends in big data and analytics have distinctly become visible. Restraint: Concern over cloud security and privacy Organizations feel that using cloud managed services would result in loss of control over their organization and providing third parties access to their processes would hamper their privacy. Cloud managed services involve a number of third parties outsourcing their abilities, which can cause security and confidentiality concerns for infrastructures in mobility, networks, database, cloud and web applications, and virtualization. Thus, for the companies, the concerns for security and privacy remain the top restraint in the adoption of cloud managed services.
What are the services offered under the umbrella of Managed Services?Cloud Managed Services Market ofeers: Managed infrastructure services Managed print services Managed desktop services Managed backup and recovery services Others Managed network services Virtual private network services Network monitoring and maintenance services Others Managed security services Threat management services Vulnerability management services Incident management services Others Managed data center services Hosting services Storage services Others Managed mobility services Managed communication services Unified communications services Email communications services
Who are the key players that provide one of the best Managed Services?IBM Corporation (US), Cisco Systems (US), Ericsson (Sweden), Accenture PLC (Republic of Ireland), NTT DATA Corporation (Japan), Huawei Technologies (China), NEC Corporation (Japan), DXC Technology (US), Fujitsu Ltd (Japan), Centurylink (US), and Civica (UK). Ericsson offers managed cloud enablement services, managed mobile virtual network enabler services, network managed services, IT managed services, and broadcast managed services and network sharing, globally. These products help meet the rapidly changing and competitive cloud managed services market, as they offer fast services to the customers. Ericsson’s cloud offerings help capture malicious activities and maximize network efficiency of the customers. Furthermore, managed enterprise cloud provided by the organization gives a fully automated platform to monitor and maintain every activity on enterprise applications. The cloud services offer flexibility, thus enabling businesses to strengthen their competitive positions in the cloud managed services market. Ericsson offers the above-mentioned cloud services to speed up new services in the market, reduce TCO, and enhance customer experience.
Which challenge is faced by the vendors and what is the available opportunity?Challenge: Limited availability of IT experts in cloud The problem involved in delivering cloud managed services is one of the major challenges in the cloud managed services market. In order to meet the desired smooth performance expected of an optimal managed IT services, MSPs must focus on empowering their staff with the highest level of expertise. MSPs need to provide their workforces with superior technical competence, administrative, and managerial skills to ensure the efficient management of cloud managed services. Efficient workforce provides optimization and technical reliability of the IT systems. In the current scenario, MSPs are providing a number of technical training for enhancing as well as changing technology to their employees. Many courses and certifications related to cloud and analytics are conducted for the students willing to take up a cloud or managed services as a career. Furthermore, various universities across the world are providing managed service training that help experts to understand the changing needs of customers and the relevant issues that companies face. Opportunity: Rise in adoption of cloud Cloud technologies are one of the mandatory implementations for growing organizations. Cloud computing increases the efficiency of the infrastructure by reducing TCO by providing business agility, faster innovations, and mobility. With the help of cloud managed services such as mobility services, network services, and security services, organizations can handle their mobile devices, manage network security, and can also focus on providing better services and gain customer loyalty. Due to the increasing trend in cloud managed services, the leading vendors across the world are strategically expanding by partnering with or acquiring companies, which can provide the right solutions to overcome the challenges of cloud managed services. For example, APAC with its commercially diverse region has some of the advanced economies in the world such as Australia, Hong Kong, and Singapore with China and India as the fastest growing economy. The organizations in this region are witnessing a rise in new ways of working and an increase in cloud computing trends. This leads to increase in demand for cloud managed services to help organizations manage the changes.
Which are the recent developments made in Managed Services market?Some of the recent developments made are: In March 2017, Cisco acquired AppDynamics, a leader in application and business monitoring. This is expected to help Cisco and AppDynamics deliver visibility across the network and drive digital transformation to enhance customer experience. In February 2017, Ericsson partnered with Verizon, a CSP, to meet the customer demands. Through this partnership, Ericsson offered its software and services to Verizon. Ericsson also managed to strengthen its business portfolio of virtual network services globally, as it is widely adopted by the CSPs. In April 2017, IBM launched IBM Customer Insights CSP V1.5, which offers CSPs the ability to improve customer retention. It also enhances the existing analytic capabilities by delivering high values through refined retention analytics. In February 2017, NTT DATA collaborated with Oracle to bring healthcare Big Data to the Cloud. This collaboration would help both the companies in predictive modelling of resources. In March 2017, Huawei launched a cloud-based high performance unified CDN solution that enables flexible distribution and an enhanced scheduling capability. It supports fixed and mobile networks, such as IPTV, OTT content, online streaming video, internet cache, and B2B CDN In April 2016, Accenture partnered with Nokia to help companies build and monetize modern networks. The partnership helped deliver new industry solutions in customer experience and analytics, and network and business transformations
Where will all the developments in Managed Services take the industry in the long term?The cloud managed services market to grow from USD 27.1 billion in 2017 to USD 53.8 billion by 2022, at a Compound Annual Growth Rate (CAGR) of 14.6% during the forecast period. The major factors that are expected to be driving the cloud managed services market are increasing Information and Communications Technology (ICT) spending, growing trend of big-data and analytics, and the need to focus more on core business activities.
OpenText provides a range of Managed Services, whether on-premises (off cloud), in the OpenText Cloud, in hybrid scenarios or even in other clouds. The company provides full managed services for EIM solution with agreed upon SLA’s to meet business needs.
Accenture delivers managed services through several approaches, including gradual and phased mobilization, hybrid delivery model, and robust governance mechanisms. It provides cost-effective flexibility and scalability. Accenture offers its managed services across the globe and caters to organizations of all sizes, across industries.
Cisco is a leading provider of managed services catering to a wide variety of clients from across industry verticals. It has a comprehensive portfolio of managed services that comprise data center services, network services, security services, and collaboration services. Cisco’s managed services allow enterprises to transform traditional business operations into integrated business processes. Its services allow clients to boost productivity and performance.
CompuCom helps business plan and budget for every step of IT asset lifecycle. It leverage a proprietary, ITIL Integrated Infrastructure Management (IIM) framework that cuts costs and improves digital transparency while aligning technology management with business goals and corporate culture. It’s DaaS includes all the technology hardware, managed services, and consulting that need to select the right devices for business and keep them running, updated, supported and retired.
Fujitsu is a provider of Information and Communications Technology solutions, products, and services. It caters to a multitude of customers from various industries. Its offerings in the managed services arena include managed infrastructure services that decrease expenditure and increase efficiency through high-quality service design and technological innovation.
TCS managed security offers managed cloud security, cyber crisis management, managed security device management, and threat advisory and intelligence services. The managed services provided by TCS for contact center and unified communications support proactive as well as reactive monitoring of servers and applications. TCS also equips clients with technical support (IT operations) for seamless operations and improved end-customer experience.
ATOS provides managed workplace services that supply the workforce with the necessary tools and support to undertake the required tasks. Its solution ensures the execution of business processes as per workforce requirements. Through ATOS, the client’s computing and storage resources are optimized across their lifecycle.
AT&T offers a range of services to support day-to-day activities related to IoT. These activities include SIM management, billing, reporting, a bi-annual health check of IoT solutions, and console administration training. Managed services provided by the company maximize the capabilities of IoT solutions with skilled resources and thereby streamline business operations. AT&T focuses on internal resources to manage business and customers and eliminates the need for support staff for IoT solutions.
GTT offers multilayered security and comprehensive compliance packages backed by full management, support, and monitoring to protect confidential enterprise data. Managed security offerings by the company are flexible and help one choose from security delivered from a range of deployment modes such as from the cloud, on-premises, or hybrid. Managed security services also reduce risks related to blended attacks.
DXC Technology has a comprehensive managed services portfolio that includes cloud managed services. It offers customized services such as cloud services for AWS, managed services for Microsoft Azure, managed services for VMware, and managed services for virtual private cloud. The company’s cloud services allow organizations to focus on strategic business priorities by shifting the complexities of building and managing their IT infrastructure to DXC Technology.
Unisys provides centralized solutions and IT support for mobile engineers through its field engineering services. The company’s infrastructure solutions include data center, hybrid cloud, and collaboration services. Unisys Application Managed Services deploy the power of advanced analytics to implement a dynamic approach toward applications. The solutions are designed to be future-ready and to support cloud, hybrid, and on-premises deployment.