Managed Services Get a Boost in the Down Economy
In the face of the current economic crisis, enterprises are recognizing the importance of network and telecommuni-cations products and services to achieving a faster recovery, according to a survey of more than 2,300 IT executives and technology decision-makers in North America and Europe.
Mobility, unified communications (UC), and managed services are the areas where companies are placing the most investment, concluded Forrester vice president and research director Ellen Daley, author of a report on the findings. For most, it’s certainly not in telecommunications or networking. In fact, 48 percent of small to midsize businesses (SMBs) and 58 percent of enterprises plan to reduce their telecom/network budgets, while only 18 percent of SMBs and 10 percent of enterprises plan to increase them.
But the economic picture is not all bleak. “While the down environment is making most technology areas suffer, managed services is getting a boost as firms look for more flexible payment models that limit capital expenditure, but also can keep them current with technology changes that help their firms,” Daley said. “This further accelerates an industry move to a more flexible services model for fulfillment of telecom, network, and IT technology changes.”
Forty-seven percent of enterprise respondents and 37 percent of SMB respondents say they have already purchased managed or outsourced telecommunication services. Unlike in past years, however, the top reason isn’t cost savings: Both enterprises and SMBs say they are motivated to use managed services to focus on their core business competencies and not just keeping the network running.
Of the managed services, Web conferencing and collaboration are among the most popular, with 52 percent of enterprises and 55 percent of SMBs expressing an interest in the technologies.
It is worth noting, though, that SMB use of managed services and outsourcing for telecom applications lags behind enterprises, identified as firms with more than 1,000 employees. Only 37 percent of SMBs—compared to 47 percent of enterprises—use managed telecom services. Only 4 percent of SMBs plan to go to managed services in the next year, and 11 percent are considering it. An alarming 42 percent of SMBs expressed no interest at all in managed services.
Other survey findings include:
• Contact center IP migration continues, with 51 percent of enterprises deploying IP contact centers (8 percent piloting, 31 percent implementing, and 12 percent upgrading/expanding). Among SMBs with more than 50 contact center seats, 54 percent are deploying IP contact centers (33 percent are implementing, 10 percent are upgrading or expanding, and 11 percent are piloting the technology).
While spending on these technologies is flat this year, primary investment is going toward workforce optimization, with 36 percent of enterprises and 38 percent of SMBs identifying it as a priority. Interactive voice response (IVR) and IP upgrades landed in second and third, respectively. Among SMBs alone, 18 percent are implementing IVR technology, while 10 percent are expanding/upgrading, 1 percent are piloting, and 41 percent are considering its adoption.
To date, there’s only tepid interest among both enterprises and SMBs in software-as-a-service (SaaS) or hosted contact center solutions. In fact, almost half of SMBs report not being interested, while only one-quarter plan to outsource more of their remaining contact center seats, and nearly two-thirds (63 percent) plan no change in the number of outsourced seats.
Among enterprises, 30 percent plan to outsource more of their contact center seats, while 51 percent anticipate no change, and 10 percent plan to reduce the number of seats outsourced.
• Unified communications (UC) adoption continues to see traction, with 22 percent of enterprises and 24 percent of SMBs already using or implementing a UC solution. Just 12 percent of enterprises and 20 percent of SMBs report no interest in doing so.
Among enterprises, 9 percent are expanding/upgrading their current UC solutions, 15 percent are piloting one, and 39 percent are interested in or considering UC solutions.
The main motivations for adopting UC are cost savings, increasing communications between employees, reductions in decision time, and improved customer support.
Integrated voicemail, email, and instant messaging top the list of the most desired UC features, followed by conferencing and telepresence. But SMBs—like enterprises—still prefer to roll their own; only tepid interest exists for UC managed services.
• Gradual growth in desktop Voice over Internet Protocol (VoIP) continues. Thirty-four percent of enterprises and SMBs have already implemented or are implementing desktop VoIP, and 14 percent of enterprises and 9 percent of SMBs are expanding or upgrading their VoIP environment. Four percent of SMBs are piloting a solution, and nearly one-quarter are interested in buying a desktop VoIP solution, while between 34 percent and 37 percent of the firms surveyed are interested in IP video- and audioconferencing.
• Service cost is the single most important factor for SMBs when choosing a landline voice vendor (82 percent), with vendor financial stability and viability second (71 percent), and service-level agreements (SLAs) third (69 percent).