IDC: Managed converged communication services to grow

IDC research predicts that the Asia Pacific enterprise managed services and outsourcing market is set to boom.

The independent analyst and research group claims that the APAC region (excluding Japan) will see the enterprise ICT outsourcing and managed services market exceeding US$29.5 billion in 2008, an 11 percent increase over 2007.

IDC expects value added managed services or discrete outsourcing to outperform the market with 16 percent growth which is set to reach US$9.1 billion in 2008. In-depth findings are published in IDC's research paper titled: "Asia/Pacific (excluding Japan) Enterprise ICT Outsourcing and Managed Services Forecast and Analysis - Landmines In An Economic Slowdown?"

Adrian Dominic Ho, research manager for IDC's Asia Pacific Managed Services and Enterprises Networks, said despite the drumbeat of economic and corporate earnings coming out across the world, several signs are beginning to point to an economic slowdown.

“We continue to be cautiously bullish that the industry can withstand the headwinds of a slowing economy,” he said.

Cost savings continue to drive the outsourcing and managed services industry, which explains its resiliency, according to IDC. However, they expect a slight slowdown in business transformation engagements due to the growing economic uncertainty. Despite this, organisations are still crying out for true and real innovation and it is here that will provide some of the richest prizes in this industry for service providers.

According to Ho, the managed converged communication market will be the fastest growing engagement in 2008 with an annual growth rate of 26 percent. Over the next 12 months, IDC believes that some of the major transformation themes that will feature strongly include the continued standardisation and migration to an all IP converged platform.

"The real innovation here is the introduction of messaging and collaboration tools from video conferencing to instant messaging,” said Ho. "Enterprises believe an effective communications strategy is becoming vital and are looking for unified communication solutions to be integrated into their desktop and IP-transformation managed services engagements."

He believes that data centre-managed services will continue to feature prominently in the years ahead. Managing a data centre is one of the biggest "pain points" for today's IT managers as a result of the escalating cost associated with it.

"The cost of managing data centres has reached breaking point but fortunately there are technologies out there from virtualisation to power and cooling that can help. Enterprises are looking for service providers that can deliver a holistic approach and solution in an outsourced and hosted model to resolve their data centre issues," he said.

With consolidation and centralisation of data centres, IDC also believes that application performance delivery across the WAN becomes another critical factor. Managed WAN optimisation and load balancing are some of the emerging forms of managed services that are being derived out of data centre consolidation activity. In 2008, IDC expects data centre-managed services to grow by 18 percent.’

Another interesting development emerging is in the realm of off shoring. Ho believes that the uptake of off shoring will increase as enterprises mature, moving beyond basic bread and butter maintenance to project based initiatives including application and network management.