Asia's managed services market on the rise

The overall market is expected to grow by 8.8 percent this year, with the value-added managed services segment to increase almost 15 percent, says research firm.

The region's combined enterprise and telecom carrier managed services market is projected to grow by 8.8 percent in 2005 to US$14.6 billion, according to research firm IDC.

Last year, the enterprise managed markets clocked US$13.26 billion, while the telecom carrier market was worth US$208 million in the Asia-Pacific region (excluding Japan).

Adrian Ho, IDC Asia-Pacific's senior market analyst for networking research, noted that telcos had hit this sweet spot in 2004: "Telcos across the region rolled out managed services offerings and made acquisitions to mitigate stagnant data revenue. Network equipment vendors had pursued strategic tie ups with telcos, while IT service providers refreshed their managed services portfolio to mark their territory against new competitors."

IDC also predicts that a specific segment of the overall managed services market will see exceptional growth. The value added managed services market (VAMS), which includes managed network service and Web hosting but excludes managed connectivity, will grow by almost 15 percent.

To exploit the burgeoning VAMS market, Ho advised telcos not to be a "one trick pony". Instead they should expand their portfolio to become "a supermarket of managed services products" by forming partnerships with vendors beyond the networking community.

“Partnerships and alliances are vital as this would give telcos the breadth in expertise required to catapult them into the big league of professional services," he said. "If telcos execute well here, they will become formidable competitors in this marketplace."