Rapid technology evolution and the proliferation of unified communications and collaboration tools are increasing the cost and complexity of managing and upgrading the enterprise information and communications technology (ICT) infrastructure. At the same time, most CXOs say their IT operations are relatively ineffective in enabling the organization to pursue broader business objectives, according to Frost & Sullivan's recent survey of more than 200 C-level executives. (Clients can download the full report at www.frost.com.) That opens up some opportunities for hosted and managed service providers to relieve the burden on in-house IT staff and allow them to focus on more strategic tasks, helping them gain a competitive advantage.
Both supply-side and demand-side data suggest that the markets for hosted and managed UCC services will continue to grow over the next few years. Most respondents expect to either maintain or increase hosted services usage levels, and more than 40% of non-users are likely to implement hosted services in the future. A similar percentage of non-users plan to deploy managed services, although fewer current users expect to significantly increase usage. Overall, the top most influential drivers for hosted and managed services are resources, costs, and flexibility.
Generally speaking, hosted services deliver significant benefits to small businesses and large distributed organizations such as those in the retail, financial services, and hospitality industries, where adoption is highest. Managed services have greater penetration in the public sector and other industries where organizations need to retain a greater degree of control over their infrastructure but want to consolidate vendor relationships and reduce costs.
Overall, hosted services are more popularly used for more commoditized UC&C capabilities, or for those that have traditionally been delivered via the cloud, such as e-mail and social media. Managed services are typically used for more complex, mission-critical technologies, such as corporate telephony systems. But the maturity and availability of hosted and managed services also impacts their adoption. For example, the popularity of consumer e-mail services delivered through the cloud is driving demand for hosted e-mail among businesses as well.
Most businesses report using mostly in-house resources to implement and integrate UC&C tools. With the increasing complexity we're seeing in advanced communications technologies, services providers have an opportunity to help companies more effectively and economically deploy these tools than those companies can by using internal resources.
And indeed, the research shows that larger businesses are turning to managed-services providers to help them better manage multi-vendor technologies on their premises without the disruption and security risks of migrating solutions to the cloud. But concerns related to security and control continue to deter deployment of hosted and managed services. Providers need to strengthen their marketing messages, setting non-users' minds at ease that services offer a safe and manageable option.
Many businesses report using telcos such as AT&T and Verizon for the delivery of various UC&C services. Familiarity and trust, combined with network reach and the ability to bundle connectivity services, give telcos a competitive advantage in the delivery of hosted, managed, and implementation/integration services. Still, more than one-third of organizations rely upon multiple managed service providers. Since simplicity is a top motivator for using managed services, providers offering "one-stop-shop" services are likely to gain a competitive advantage in this space.
