Managed service providers (MSPs), as outsourced contractors, manage and assume responsibility for providing a clearly defined set of services to their clients. Organisations employ managed service providers for a variety of reasons, including:
Reduction of complexity
Lack of capital to execute strategic initiatives
Lack of resources to align current infrastructure and people with strategic initiatives
Improvement of the linkage between ICT resources and critical business processes
The impact of the 3rd Platform technologies that IDC identifies as drivers of change
The key reason for customers to use a managed service provider is still the increased cost savings. So, service providers clearly need to provide a strong business case to their customers. However, this survey shows that they also need to address soft factors such as the ability to provide business continuity, security, improvements to customer service/satisfaction, and real flexibility.
Whilst telcos have some strategic advantages addressing the managed services market, particularly in cloud, due to their network and bandwidth, it is clear from this survey that customers are not always influenced by these. It also shows that they have reservations about telcos, particularly around their perceived lack of global and local presence, lack of integration skills and IT expertise, and inability to customise solutions with telco services, as the offerings are too standardised.
To be successful in the managed services market, telcos need to be more flexible in their offerings and review how they can provide bespoke services and rely less on the traditional standardised telco model. Telcos will often need to work alongside other managed service providers to cover all services the customers seek.