It is Happening
Increasingly, starting with enterprise, IT and financial sectors, organizations have begun to work with trusted providers, transferring delivery and management of services.

In the telecommunications space, over the past few years, operators have begun to transfer the management of individual VAS solutions to experienced third parties.

Speaking about the broadband managed service deal with Alcatel-Lucent, Manoj Kohli, CEO and Joint MD, Bharti Airtel says, “It will help us accelerate performances as we migrate to next generation network for our broadband and telephone customers, opening the door to advanced services and applications.”

Another major trend in the managed services space is a clear move towards an outsourcing/shared service and opex model. Customers now understand the value of using skilled service providers to outsource their needs to and move to a more scalable, flexible model.

The Indian market has tremendous potential as most enterprises are looking for an integrated solution to replace the individual management tools that they currently use for individual devices. Multi-service platforms present complex network management challenges for service providers.

Each new function of the network involves different issues and objectives, which often call for targeted applications for rapid implementation. Continuously increasing network traffic, shortage of skilled workers and need to focus on core activities are the primary drivers of network management services and this will continue in the coming year too. Factors such as increasing penetration of broadband, online collaboration, e-commerce, and globalization are also driving the demand for these services.

Trust Matters
Though the Indian managed services market is touching new heights, the biggest question here is: Can operators trust an external company which may be managing services of their competitors too? But most of the major players in this space believe that they can easily trust an external service provider. Their SLAs on security and privacy, which service providers sign, are able to successfully deliver with the help of the capabilities enabled by today's technology.

Globally, as a practice, companies do not hesitate in choosing a trusted vendor who is servicing the competition as long as data secrecy and security is taken care of. “On ground it is backed by stringent security compliances and SLAs, therefore, I believe that the operators can trust an external service provider that offers managed services as it not only manages the infrastructure but also paves the way for smooth outsourcing operations,” says Sanjay Virnave, president, sales, Tulip Telecom.

One of the key factors for any managed services operation to succeed is that the partner is more of a partner than an external company. And partnership is born out of trust. A partner ensures that no intellectual property or intelligence associated with the business is shared with the competitors. “Managed service partners and their employee maintain the highest level of ethics to assure absolute business confidentiality across competition,” says Sandhir of Alcatel-Lucent.

According to Neeraj Vyas, AVP, Aricent, “We do not necessarily see this as a challenge. Every managed service engagement for us is separate, and significant resources are spent in ensuring that the customer's IP is protected.”

Boon for Greenfield Operators
The scope of managed services will further grow considering the appetite among operators to share base stations and hardware to cut both capital and operational expenditure during the slowdown. Managed services will also be a boon for greenfield operators, that are in the market to battle for their survival and supremacy.

For greenfield operators, the biggest challenge is deploying a highly efficient and optimized network in a short time frame and bringing together a qualified and trained team for maintenance of the network so that the quality of the network can be maintained.

Telecom service providers are faced with a scenario where the market environment is changing rapidly, the battle to grow market share is ferocious, the need to engage customers with practical and appealing services is paramount, and the drive to improve top and bottomline performances.

According to Vikram Sharma, head, managed services, Cisco India and SAARC, “In essence, service providers who are battling commoditization of their current offerings leading to declining customers loyalty and shrinking margins, evolve into experienced providers by offering sticky and differentiated services that add strategic value to end customers.”

It is beneficial for greenfield operators because they no longer have to really bother about network design complexities, deployment and scalability. They can focus on their customers and let the managed service providers take care of the service piece.

According to Rajeev Batra, CIO, Sistema Shyam Teleservices, its contact center operations will grow at rapid pace, in line with its expansion across 22 circles in India.

Road Ahead
It is believed that the managed services industry will continue to grow in spite of recent changes in the global economy. At present, the success of all companies, small and large, is based on their ability to keep their costs low without sacrificing the quality of services provided to the client. The managed services model helps them reach their goals while staying within a budget.

The future of the managed services market is going to be end-to-end manged services across technologies and across vendors making the managed services partners as the single point of contact for everything related to the network. The growth in the upcoming financial year will revolve around integration of various networks into a single measurable, SLA driven entity with a focus on operational control and management.

In the telecom space, launch of new technologies like 3G and 4G will enable operators to offer bandwidth hungry applications such as video-on-demand, network gaming applications and video-RBT among others. The key to success is enabling timely deployment of such applications, avoiding costly practices and extra expenses. By working with a third party and with experience from other markets, operators can mitigate the risk of heavy investments in a technology whose time has not come.

Arpita Prem
arpitap@cybermedia.co.in