Enterprises Plan to Increase Managed Services Spending Over the Next 18 Months, Pyramid Finds

Jan 12, 2011 (02:01 PM EST)

CAMBRIDGE, Mass., Jan. 12, 2011 /PRNewswire/ -- As enterprises continue to seek ways to contain costs and limit spending, they will invest a large portion of their IT budgets on network-centric managed services. This willingness to spend more money on managed services should serve as a wake-up call for operators and vendors, according to a new report from Pyramid Research (

Managed Services for Enterprises: Telco Operators and Vendors Capitalize on the Need of Businesses to Focus focuses on network-centric managed services offered by operators and technology vendors in areas like network security, data center, videoconferencing, and telepresence to enterprises. First, this report leverages Pyramid's enterprise survey data to highlight emerging market opportunities for telecom operator- or vendor-managed services. Second, it mines the survey results and presents a case study to determine the key reasons why enterprises of all sizes have embraced and are benefitting from managed services. Third, the report examines industry trends over the next 18 to 24 months. Fourth, the report highlights key target enterprise markets for operators and vendors looking to expand their managed services footprint. The report concludes with a demand analysis and recommendations for operators and technology vendors.

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Enterprises indicated the two most significant variables for choosing a managed service are to gain a competitive advantage and to save on capex costs. As a result of the recession and its continued effects, enterprises are being forced to cut costs, indicating the largest incentive to invest in managed services. "A significant number of enterprises are willing to spend large portions of their IT budgets – between 10 percent and 20 percent – on network-centric managed services, as operators and vendors continue to prove the value and reliability of their offerings," says Denise Culver, Analyst at Large at Pyramid.

"While growth in revenues from traditional businesses continues to slow down, and in some instances, declines, operators, and vendors alike can expand their managed services offerings to replace that lost revenue," says Culver. According to survey respondents the two factors that would most likely affect an enterprise's decision to outsource its IT services are better applicability to business processes and the ability to lower costs. "This presents a tremendous marketing and educational opportunity for MSPs. Vendors and operators with large advertising budgets – such as Oracle, BT, and Motorola – have the chance to promote managed services to enterprises, thus driving up usage. As this happens, it will drive adoption of managed services further down the chain to those MSPs that don't necessarily have the marketing power of large players," she adds.

"MSPs will also drive adoption of managed services, as they move away from focusing on IT-centric managed services and develop other opportunities that enable them to increase loyalty and drive down costs," Culver points out. Virtualization, M2M, network security, and VoIP have been identified by MSPs as key drivers for managed services to be adopted by enterprises.

Managed Services for Enterprises: Telco Operators and Vendors Capitalize on the Need of Businesses to Focus is part of Pyramid's research report series.

CONTACT: Jennifer Baker, +1-617-871-1910,

SOURCE Pyramid Research