Managed Services Europe
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Published March, 2006 |
Who Should Buy this Report
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Report Synopsis
Market forces have conspired to create a new space in managed services. Briefly entered then exited by telcos and ASPs following the dot.com collapse, managed services have emerged as an opportunity experiencing growth from a small base, and currently running at 20% per annum.
This new report assesses for the first time the Managed Services market in Europe and draws upon a survey of 80 players across the region. Interviews were conducted with the 7 types of player engaged in the managed services space including data centres, systems integrators, hardware and software vendors, telcos and ISPs.
The speed of change in managed services is matched only by the rate of barriers to entry falling. It is characterised too by the number of new entrants converging in the space from outside traditional integrators and professional services companies, including the Data Centre provider and Telcos. The volume of new entrants demonstrates the compelling attraction across all segments for longer-term recurring, sustainable rental revenues.
Growth drivers are found in changes occurring in the Enterprise; provider players are seeking new sources of rental income and mitigation of revenue declines in traditional businesses. As large scale outsourcing appears to be on the wane, Enterprises are seeking new alternatives including multisourcing and near-shoring.
Competitors in the managed service space are encountering challenges in the delivery of managed services, and at a time of further change in technologies. New business models are emerging as utility computing and on-demand services are being invested in and tested.
Finding that Enterprises are increasingly receptive to partial third-party management of infrastructure and assets, players who have have moved into the managed service space will confront the need to choose between the delivery of standardised or customised solutions. In doing so, the importance of collaborative partnerships for all players is emphasised throughout the report, even though this may result in other trade-offs.
The report observes that migrating to managed services requires investment as well as acceptance of risk. Competition is intensifying, the cost of sales and channels and pressure to produce standardised products is increasing. In addition, the emergence of “on-demand” or pay-as-you-go IT models is occurring as providers attempt to broaden acceptance of hosted services.
Evidence gathered for the report suggests that Telecom Providers will eventually dominate the hosting market due to their business scale and customer-market presence, taking approximately 32% market share by 2011.
Although all service providers will benefit from the adoption of managed services, Data Centres stand to gain extensively by providing carrier neutral space to the System Integrators and Hosting providers. This argument runs counter to the view that Data Centres will gain most by providing managed services directly to the enterprise customer. Data Centre revenue share for direct end user managed services will be relatively small but for those positioned with blade servers the opportunity to acquire further revenues will be high.
The report is a tour-de-force carrying the reader across the all-important player segments, assessing their strengths and weaknesses and the challenges they confront in the quest to provide managed services. The research identifies key trends and new issues – software as a service, utility computing, hosted applications, seismic changes in the integrator market, VoIP and the integration of LAN and WAN and the criticality of managed services not yet fully recognised among players seeking to define market positions in the space.
The report concludes with forecasts of managed service market growth through to 2011.
Table of contents
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Forward and Acknowledgements Executive Summary CHAPTER ONE – INTRODUCTION TO THE CONCEPT OF MANAGED SERVICES
CHAPTER TWO – THE MANAGED SERVICES MARKET MODEL
CHAPTER THREE - MANAGED SERVICES - THE DATA CENTRE PROVIDER
CHAPTER FOUR - MANAGED SERVICES - THE TELECOMS PROVIDER
CHAPTER FIVE - MANAGED SERVICES - THE HOSTING PROVIDER
CHAPTER SIX - MANAGED SERVICES - THE DISASTER RECOVERY AND BUSINESS CONTINUITY PROVIDER
CHAPTER SEVEN - MANAGED SERVICES - THE SYSTEMS INTEGRATOR PROVIDER
CHAPTER EIGHT - MANAGED SERVICES - THE SOFTWARE SERVICES PROVIDER
CHAPTER NINE - MANAGED SERVICES - THE EQUIPMENT AND HARDWARE PROVIDER
CHAPTER TEN – THE FUTURE OF MANAGED SERVICES IN EUROPE
CHAPTER ELEVEN – CONCLUSIONS – MANAGED SERVICES IN EUROPE
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List of charts and tables
| FIGURES | |
| Figure 1. | Types of Player in Managed Services space |
| Figure 2. | Four Main Stages in providing a Managed Service |
| Figure 3. | Managed Services Value Chain – All Service Providers |
| Figure 4. | Managed Services Model |
| Figure 5. | Strategic Product-Market Options for Managed Services |
| Figure 6. | Critical Elements of Managed Services Offering |
| Figure 7. | Data Centre SWOT Analysis |
| Figure 8. | Telecom Provider SWOT Analysis |
| Figure 9. | Dedicated Hosting Provider SWOT Analysis |
| Figure 10. | Specialist Disaster Recovery and Business Continuity SWOT Analysis |
| Figure 11. | Systems Integrators – SWOT Analysis |
| Figure 12. | Software Providers – SWOT Analysis |
| Figure 13. | Hardware and Equipment Vendors – SWOT Analysis |
| Figure 14. | Segment Analysis – Managed Services Providers |
| Figure 15. | Competitor Shift to Managed Services by Scale and Competencies |
| Figure 16. | Data Centres Managed Services Hierarchy |
| Figure 17. | SAVVIS model for the Virtualised Data Centre |
| Figure 18. | Typical Telecoms Provider Product Mix |
| Figure 19. | Telecom Service Mix |
| Figure 20. | Typical Telecoms Provider and Managed Service Provider Partnerships |
| Figure 21. | BT IT Services Model |
| Figure 22. | COLT Managed IT Solutions Portfolio |
| Figure 23. | Taxonomy of Market Segmentation in Managed Services |
| Figure 24. | IT Resources and current focus on legacy systems |
| Figure 25. | IT Infrastructure – Average Usage and Utilisation |
| Figure 26. | Distinction between Back-up and Disaster Recovery Facilities |
| Figure 27. | Degree of third party involvement in Disaster Recovery and Business Continuity |
| Figure 28. | Systems Integrator Market Structure |
| Figure 29. | System Integrator’s Managed Service Hierarchy |
| Figure 30. | Attenda’s Key Differentiators |
| Figure 31. | Microsoft Licence Sales of Software as a Service by Resellers Europe 2004-2006 |
| CHARTS | |
| Chart 1. | Survey Results: Key Managed Services identified by Data Centres |
| Chart 2. | Survey Results: Most Common Data Centre Managed Services Offerings |
| Chart 3. | Annual Growth Prospects (in %) for Data Centre provided managed services (by % of Respondents) |
| Chart 4. | Most Common Managed Services from the Telecoms Provider |
| Chart 5. | The most Popular Managed Services provided by Integrators |
| Chart 6. | The European Market for Managed Services – 2006 to 2011 |
| Chart 7. | European Managed Services Forecast Growth – 2006 to 2011 – by sector |
| Chart 8. | Market Share (by % of Revenues) in Managed Services 2011 |
| TABLES | |
| Chart 1. | Examples of Managed Services Providers and Sector Involvement |
| Chart 2. | Types of IT Managed Service Provided by the Systems Integrator |
| Chart 3. | Pricing for the main CRM Providers per user per month |
| Chart 4. | Key Questions for Managed Services Providers |
| Chart 5. | Management of Goals for Managed Services Providers |
