The past year has been a growth year for managed service providers (MSPs) despite the troubled economy. In fact, unlike vendors and pure-play hardware resellers, many MSPs experienced growth because of current macroeconomic trends.
One of the top growth areas for MSPs is offering managed VoIP services. Among organizations using MSPs, 33% used them for VoIP services, up from 22% last year, 14% in 2007, and 6% in 2006.
Why the need for managed VoIP services?
Most businesses are in the process of evaluating, implementing, or operating IP telephony systems and VoIP throughout their WANs. But while they're aggressively rolling systems out, they face huge challenges when it comes to effective monitoring and management. That's because as enterprise demand for communications support increases, IT budgets remain flat or even decrease. What's more, headcount within the overall IT department is stagnant or decreasing, forcing companies to do more with less.
The problem is that when it comes to VoIP, there must be telephony-style quality of service (QoS). There is no time for lost packets and stalled communications. Previously, companies addressed IP telephony performance problems by assigning more staffers to monitoring and management. That was when these companies had budgets to hire experts and staff to troubleshoot problems.
With flat budgets, companies generally adopt one of two approaches: Some buy specialty IP telephony management tools to make sure the existing staff can isolate and resolve problems accurately and efficiently. Others rely on third-party MSPs to monitor and manage the system and troubleshoot user problems.
MSPs are in a particularly good spot now because many enterprises are realizing it's not so easy to manage VoIP networks and applications in-house. Network managers are often shocked to discover how many tools are required. Companies typically buy anywhere from one to six additional monitoring products (with the average being two) to effectively manage their IP telephony services. These include tools to address configuration, network and application performance, asset and change management, and event correlation.
What's more, network managers find that while many IP PBX vendors such as Alcatel-Lucent, Avaya, Cisco, Mitel, Nortel, ShoreTel, and Siemens offer varying levels of management and monitoring with their products, customers must still supplement these with third-party tools. Making matters worse, customers often come to this realization 24 to 36 months after going into production.
What kind of MSP do customers want for managed VoIP services?
That's when customers tend to turn to MSPs. And they tend to depend on smaller, regional MSPs to deliver managed VoIP services. In fact, 60% of organizations with fewer than 1,000 employees turn to regional MSPs. Why? They prefer the local presence and security of knowing an expert can be on site quickly. Furthermore, they view the MSP as an extension of their IT staff -- which isn't always the case with large, global MSPs.
MSPs must offer diverse tools to manage multi-vendor networks
Regardless of whether MSPs are regional or global, they must be able to monitor and manage multi-vendor networks and applications.
Many MSPs, including global carriers such as AT&T, BT, Orange Business Services and Verizon, as well as large systems integrators such as EDS and IBM, use their own platforms to remotely monitor and manage IP telephony and unified communications (UC) systems. For example, Verizon uses its own Impact platform to remotely monitor and manage not only the WAN, but customers' UC systems.
Often, they augment those systems with third-party tools from vendors such as Fluke Networks, Infovista, Integrated Research (Prognosis), NetIQ, and NetQoS. Smaller local and regional VARs tend to use management products from the vendor-manufacturers, as well as some of the third-party management tools that can provide information on multiple vendors.
The ability to monitor multiple vendors' systems will become critical, as it is unlikely that businesses will use only one vendor's system forever. Also, large organizations may never have a single vendor. Though some companies are staunch single-vendor shops, as IP telephony becomes only one component of vast unified-communications architecture, multi-vendor systems will become unavoidable. In addition, mergers and acquisitions often bring along a new set of vendors, and while they may be supplanted by the standard platform, the next acquisition just restarts the cycle.
Bundling VoIP and unified communications services
Because VoIP is such an integral part of UC, it is likely that MSPs will do well by combining service offerings for the two sets of applications. We expect more organizations to rely on service partners to assist with the monitoring and management of their UC infrastructures. In fact, half of the IT professionals we work with state that UC-professional services are vitally important because UC adds more network complexity, and real-time applications bring along requirements for increased bandwidth and stringent QoS guarantees.
MSPs have the opportunity to create competitive advantage by exceeding enterprise management and reporting requirements for VoIP and UC. To do so, they should promote and bundle network services to support collaborative applications and application optimization.
The bottom line is that providers should be comfortable with multiple vendors that arm themselves with tools allowing them to offer better QoS to improve the experience for users. Their offerings should enhance services, not just manage the application.
Katherine Trost is a research analyst at Nemertes Research, where she focuses primarily on professional services.
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