New Report Forecasts 17.78 Percent CAGR Growth for Managed Services within Telecom Sector from 2012-2016

By Laura Stotler

A new report on global managed services within the telecom industry from Research and Markets shows that this sector grew at a CAGR of more than 17.78 percent from 2012 to 2016. The report, from the company's TechNavio analysts, forecasts that market growth will largely be driven by a reduction in managed service providers' (MSP) overall expenses.

The global managed services market within the telecom sector has also been affected by increased adoption of cloud-based services, according to the report. Future cloud-based services growth, however, could be hindered by concerns about the quality of network services.

The report encompasses managed services in the telecom industry landscape within the Americas, the EMEA and the APAC regions, as well as growth prospects within the coming years. It also features a discussion of key vendors operating in the space, including Ericsson Inc., Huawei Technologies, Co. Ltd., Alcatel-Lucent SA and Nokia Siemens Networks B.V.

Cisco Systems Inc., Hewlett-Packard Co., IBM Corp., Motorola Inc. and ZTE Corp. are also included in the discussion.

"The increasing adoption of cloud-based managed services is one of the emerging trends in the global managed services market in the telecom industry," said a member of the TechNavio Telecom team. "Recognizing the growing popularity of the cloud, vendors in the market are currently offering managed services for cloud-based environments. Managed services help mitigate the operational risk of moving services to the cloud."

Since overall expenses may be reduced by using cloud-based services, savings is a major driver in managed services adoption within the telecom industry. Managed telecom services are also a cost-effective way for network operators to gain access to expertise, knowledge and experience. Outsourcing telecom networks may also reduce redundancy costs for operators, while providing high economies of scale for service providers and operators.

The report also shows that declining average revenue per users has forced operators to streamline their operations and cost structure. They may do this by outsourcing activities that add less value to their bottom line, which should encourage them to adopt managed services. This can result in a reduction of both their capital and operational expenditures.

"The cloud also meets the requirements of enterprises with respect to security, control, and ease of integration," notes the report. "Hence, with cloud-based managed services gaining prominence in the market, adoption of these services by enterprises should increase significantly. Another reason for the anticipated increase in their adoption is the fact that cloud-based services can help enterprises reduce their overall cost and help them manage their resources better."

Edited by Braden Becker

MSPToday Contributing Editor

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