Managed and Hosted Services on the Rise as Telcos Make a Play for the Outsourcing...

Managed and Hosted Services on the Rise as Telcos Make a Play for the Outsourcing Game

SINGAPORE--(Business Wire)--
With global service providers (SPs) such as BT and Verizon having
significantly ramped-up investments in Asia-Pacific, and regional
telcos like Tata, Reliance Communications and SingTel continuously
diversifying their offerings, managed and hosted services is poised to
constitute a sizeable percentage of operators' portfolio in the next
few years.

New analysis from Frost & Sullivan
(http://www.communicationservices.frost.com), Strategic Analysis of
Managed and Hosted Services Market Opportunities in Asia Pacific,
finds that the market - covering 13 Asia-Pacific countries ex-Japan -
was worth some US$6.47 billion in 2007, and estimates this to grow at
a CAGR (compound annual growth rate) of 16.6 percent (2007-2010) to
reach a market size of US$10.25 billion by end-2010.

The most commonly contracted outsourced services are managed and
hosted infrastructure/network (WAN, data centre, web hosting),
managed/hosted applications (software applications), managed/hosted
communications, and managed/hosted security.

The increasing maturity in such services has improved cost
visibility and granularity, making managed and hosted offerings a more
compelling proposition to both large enterprises and SMBs (small and
medium businesses). As the market reaches a new dimension of increased
price pressures and decreased service differentiation, further
compounded by the relatively weaker credit outlook, the need to
demonstrate cost optimization and adopt a business value-driven sales
approach becomes necessary.

If you are interested in more information on the Asia-Pacific
managed and hosted services market study, then send an e-mail to Sarah
Lourdes at sarah.lourdes@frost.com, with your full name, company name,
title, telephone number, fax number, and e-mail address. Upon receipt
of the above information, an overview will be sent to you by e-mail.

"Asia-Pac continues to grow both as a global demand and supply
centre. In tandem, the emergence of Asian MNCs from India, China and
South Korea continues to shape the demand for enhanced connectivity
and related services," says Frost & Sullivan industry manager Jay Tan.

"Driven by this rapid development and the corresponding need for
more sophisticated ICT infrastructure, yet growing pressure to do more
with limited IT budget, companies are increasingly looking at
outsourcing the non-core functions to support their critical business
processes," he adds.

Other factors driving the adoption of managed/hosted offerings
include the growing convergence of IT and regulatory compliance
pressures, as well as the emergence of SaaS (Software as a Service)
and utility computing.

Managed and hosted services allow companies to benefit from faster
business rollout, computing overflow provisioning, efficiency in IT
operations, specialized skill sets, and real-time management of
mission-critical ICT infrastructure and services; some of which are
either not available or too costly to maintain in-house.

To-date, MNCs and large enterprises especially those in developed
markets have led in the outsourcing of specific IT services or even
management of the entire IT infrastructure, while small and medium
companies have been slow to utilize these services on a major scale.

Some of the more mature markets in terms of technology adoption
and managed services uptake are Australia, New Zealand, South Korea,
Singapore, Hong Kong, and increasingly, India. Elsewhere in the
region, managed and hosted services have yet to take off in a big way,
although countries such as Malaysia, Indonesia and Thailand offer good
growth potential due to government-driven initiatives.

While the concept of outsourcing is not new to most businesses,
more than 60 percent of companies in the region are still
predominantly managing their IT operations in an insourcing model.
This is especially true of companies in developing and more
conservative markets such as China, Indonesia and the Philippines.

According to Tan, the innate fear of losing control over IT
operations and compromising confidential business information has been
the major factor inhibiting wider adoption of managed/hosted services.
"This, together with the bad publicity of some outsourcing
arrangements and the lack of strong customer references in some
markets are some of the issues that managed SPs will need to address
to drive uptake," he says.

As the market matures, growing competition and pricing pressures
from system integrators/IT services companies and pure-play managed
service providers can be expected. Hence, the need to innovate and go
beyond the provision of low-cost infrastructure to deliver increased
business value will be important differentiators for SPs.

Tan believes that large enterprises would increasingly embrace
out-tasking and multi-sourcing more than complete outsourcing, while
SMBs would prefer a hosted model.

The Strategic Analysis of Managed and Hosted Services Market
Opportunities in Asia Pacific study is part of the Communication
Services Growth Partnership Service program, which also includes
research in the following markets: WAN services, enterprise mobility,
IPTV, user generated content (UGC), social networking, online and
mobile content, telecom services, and network transformation case
studies. All research services included in subscriptions provide
detailed market opportunities and industry trends that have been
evaluated following extensive interviews with market participants.
Analyst interviews are available to the press.

Frost & Sullivan, the Growth Partnership Company, partners with
clients to accelerate their growth. The company's TEAM Research,
Growth Consulting and Growth Team Membership empower clients to create
a growth-focused culture that generates, evaluates and implements
effective growth strategies. Frost & Sullivan employs over 45 years of
experience in partnering with Global 1000 companies, emerging
businesses and the investment community from more than 30 offices on
six continents. For more information about Frost & Sullivan's Growth
Partnerships, visit http://www.frost.com.

Frost & Sullivan
Corporate Communications - Asia Pacific
Sarah Lourdes, +603.6207.1030
sarah.lourdes@frost.com

Copyright Business Wire 2008