IT outsourcing providers continue global takeover

21 May 2008

The global market for a range of managed IP services, including managed metro ethernet, managed IP VPNs, managed IP voice and managed security, is expected to grow by a compound annual growth rate (CAGR) of 18pc until 2012.

The market for these IP managed services will be worth US$66bn in 2012, a Cisco-commissioned report by Ovum has suggested.

The report found that Europe currently leads in the adoption of managed services but will be overtaken by the North American market, which is expected to grow into the largest market in the world for managed services by 2012.

Asia Pacific is projected to have the most rapid growth, fuelled by managed service adoption in India and China, with a CAGR estimated at 27pc over the forecast period.

The study also found that the current global market for managed IP VPN services is the largest among the managed services studied at US$17bn. By 2012, managed IP VPNs will remain the most widely deployed adopted service, although IP voice is the fastest-growing managed service with a 39pc CAGR for the forecast period.

“CIOs and IT directors are increasingly looking to service providers and managed service specialists for deployment and management of their networks to reduce costs and improve efficiency,” said Peter Hall, Ovum’s research director. “This results in significant opportunities for those able to meet those needs, especially in the areas of managed voice and security.”

“As IT and networks become ever more critical to business success, customers recognise the importance of uptime, security and performance in supporting critical applications,” commented Al Safarikas, senior director of marketing at Cisco. “The worldwide growth in managed services indicated by this study shows that businesses are recognising that these can be successfully delivered by a managed service provider.”

“Greater end-user awareness of the availability of relevant services, combined with a competitive provider environment, is creating the necessary conditions for rapid market growth in this area,” Safarikas added.

The Cisco-Ovum study was based on data collected from over 1,300 individuals in companies using managed services in 14 countries across the Americas, Europe, Middle East, Africa and Asia. The companies are in the finance, manufacturing, retail, government, healthcare and education markets.

By Niall Byrne