Competition among managed network services (MNS) providers is growing rapidly, says analyst firm Datamonitor.
The main reason for this, according to a Datamonitor report, is that enterprises are grappling with increasing network traffic and complexity. In addition, enterprises are cutting down on their service budgets.
Datamonitor states in its report: “The global MNS market is extremely competitive, particularly among the large telecommunications providers and conglomerate systems integrators that dominate it.”
The firm points out that AT&T, BT Global Services, HP Services and IBM Global Technology Services are some of the dominating players, while smaller and more agile rivals such as CSC, Orange Business Services, Verizon Business and Vanco are bringing competition into the market, despite the economic crunch.
The research found that while the vast majority of MNS revenue is driven by large enterprise customers, small and medium enterprises are increasingly seeking out MNS as their networks become more difficult to manage.
Datamonitor says the top MNS providers see the small to mid-sized enterprise market as the frontier for new customers and revenues. But the firm's research shows mid-market user sentiment varies from that of large enterprises and that most MNS providers are missing the mark when it comes to the mid-market.
According to Datamonitor, consolidation is shaping the MNS competitive landscape. “There has been a flurry of consolidation in the market. In some cases, smaller players such as Thus and Vanco have acquired newfound market impact, which may, in time, catapult them to the next competitive level. When it comes to HP's acquisition of EDS, however, it is a case of the strong getting stronger.”
The report findings show the most successful MNS providers have a combination of broad portfolio capacity, solid financial stability, excellent quality of services, customer relationship management and global reach.
It also predicts that, while managed network services will continue to align with business objectives, providers must adopt a more focused go-to-market approach and improve their execution capabilities for future success.
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