Reality Check: Managed Services Revenues at Telecom Vendors

Reality Check: Managed Services Revenues at Telecom Vendors

Here's a rather interesting prediction: At major telecom equipment vendors, managed services revenues and professional services dollars will overtake traditional infrastructure sales within the next seven years, predicts Heavy Reading, the research division of Light Reading. Is the prediction accurate? It may not matter. The broader trend is clear: As telecom companies increasingly promote managed services, SMB solutions providers will need to keep pace. Here's why.

Heavy Reading says it analyzed the portfolios of 18 telecom vendors, consultants, IT specialists, outsourcing specialists, and systems integrators. The analysis, Heavy Reading adds, was augmented with real-world case studies from Orange and Sprint, to provide insight into the realities associated with adopting a managed services model.

The bottom line: Managed services and professional services account for 35 percent to 48 percent of total revenues for leading vendors, and the figure will reach 60 percent within seven years, Heavy Reading predicts.

Advice From Cisco Systems

So how can small VARs and MSPs cope as customers increasingly leverage services such as hosted VoIP? Not by coincidence, Andrew Sage, VP of small business sales at Cisco Systems, offered some timely insights on the topic earlier this week.

Check the bottom of a Cisco blog post, and you'll find guidance from Cisco and BroadSoft. The key assertion: Even as customers shift to hosted VoIP, MSPs can partner up to get a piece of the recurring revenues while continuing to offer customers on-premises VoIP phones and network infrastructure.

Whether you agree or disagree with Heavy Readings' estimates and forecasts, it seems like the telecom pendulum continues to swing from infrastructure sales to managed services engagements.

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