M'sian SMBs not demanding managed services

There has to be more investment in awareness and marketing of managed communications services, to break the trend of low demand and supply for such services in the country, says analyst.
Written by Victoria Ho, Contributor

There needs to be more investment focused on promoting managed communications services so the circle of low supply and demand for these among SMBs (small and midsize businesses) in Malaysia can be broken, according to Ovum.

Claudio Castelli, senior analyst, Ovum, said despite SMBs in the country expecting to continue spending on telecommunications, "not many companies are considering buying specific managed services".

Castelli said the low demand can be attributed to the "immaturity of enterprise offerings" and low availability of such managed services in the market in Malaysia.

But this low supply has come about because of low awareness of managed services in the first place, the analyst told ZDNet Asia.

Castelli said: "It seems there aren't many managed services offerings because customers don't ask for these services. And they don't ask for them because they don't recognize the benefits.

"The cycle has to be broken at some stage by an innovator willing to invest...[in] customer educational programs and marketing communication to increase awareness."

Vendors eyeing this market opportunity "will have to invest first" to reap the rewards, he added.

Overall, the Asia-Pacific region is continuing to demand managed services, according to a recent IDC study. It noted that the economic slowdown will take its toll on the growth of the IT services industry, but that the market is expected to expand to US$49.4 billion in 2009, primarily fueled by demand for managed services and outsourcing.

Meanwhile, 88 percent of Malaysian SMBs polled in Ovum's recent survey said they believed investing in the latest telecoms equipment would help make business more successful.

Fixed voice accounts for 50 percent of total telecoms expenditure for the segment, with spending on mobile services accounting for just 10 percent, said Castelli. The global average stands at 32 percent.

The lower spending on mobile services can be attributed to two factors: high competition among service providers in Malaysia and the majority of companies not providing mobile devices to employees, he explained.

Among companies surveyed, 78 percent do not provide wireless devices to employees needing mobile network connectivity for work purposes, suggesting that employees provide and support their own devices for business, Castelli said.

While Malaysian SMBs are expected to scale up support for employees' devices over time, this will happen at a lower rate than the global average. "Our survey shows that Malaysia is lagging in the adoption of mobile applications," he said.

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