Growing at 20 percent annually, managed services is one of the fastest-growing sectors for service providers. Often relegated to supporting commodity “dumb pipes” (also known as “unintelligent networks”) and simple services by systems integrators, SPs need a way to increase their value-add, define a differentiated role that emphasizes solutions rather than commodity services, and reap the benefits of higher margins.
Next-generation managed services provide SPs a platform on which to expand their business models to include higher-order services that achieve greater margins and realize business goals. Industry analysts estimate that the entire managed services market (which comprises the network, computer, and application layers) will be driven by advanced managed services within the computing and application layers and will exceed US$60 billion by 2010. Getting there, however, will not be simple. Service providers must navigate the pitfalls of history and mitigate the efforts of competitors.
If SPs can learn from the past and influence the future, they will profit from next-generation managed services for years to come.
This Point of View, by the Cisco® Internet Business Solutions Group (IBSG), introduces a new managed services concept and hierarchy, providing a comprehensive map of the current market to encourage SPs to think beyond traditional managed services and the role they play in the world of next-generation managed services.
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