Wow, what a month it has been for managed business services! There has been a lot of buzz about this rapidly changing market over the past 12 months with the last 6 weeks having been especially busy. We’ve had the news of ATT announcing a managed intercompany Telepresence service, the news of HP buying EDS to shore up its global IT services delivery capabilities, and we’ve heard the updated managed services growth forecasts by Ovum that has the market growing (in a tough economy) at close to 20% CAGR over the next 4 years to top $66B by 2012. This is over twice the growth rate of IT spending.
So what’s behind this spurt in activity and robust growth projections? Well, although many of us have been talking about managed services for the past decade, it has been slow to develop. It’s only during the last four years that market growth has increased to a rate that’s interesting. During this time, we’ve seen the storm clouds forming on the horizon… the storm clouds that would form the “perfect storm” for managed services. A culmination of forces that brought together would unleash a dramatic increase in adoption of managed services.
Four forces are coming together to make NOW the time for managed services. The forces are: 1) Demand-side forces, 2) Supply-side forces, 3) Technology enablers, and 4) Economic conditions.
On the Demand-side, you have businesses of all sizes embracing managed services in record numbers. The “new” is off, the risk is lower, the business imperative to focus on “core” vs. “context” has sunk in – thanks Geoffrey Moore. Businesses simply don’t have the staff or resources to devote to adopting new technologies they need to remain competitive in today’s market. Businesses want the benefits of new technology at a predictable monthly cost, with access to expertise should they need help. Working with a managed service provider mitigates their risk.
On the Supply-side, you have IT, Network, and Services companies working to increase profit margins, reduce revenue fluctuations and improve customer “stickiness”. Managed services help them do all three. We’ve not only seen traditional IT companies grow their managed services businesses, we’ve seen them take aggressive moves into market adjacencies. Worldwide, telcos have been acquiring system integrators to shore up their ability to provide “one stop shopping” to their business customers while growing their profitable managed services revenues. This has allowed them to broaden their services portfolios to offer “managed LANs and desktop services”; areas traditionally owned by value added resellers. To differentiate themselves from the pack, managed service suppliers have been strengthening their customer service level guarantees which has further mitigated customer risk; fueling the market further.
With regard to technology enablers, we’ve seen an explosion in virtualization and network management technologies. Virtualization has changed the game - everything has become shared - networks, data centers, servers, storage, voice systems, you name it. Combined with lower cost network management platforms and new software pricing models, you have a technology environment that has made it easier for businesses of all sizes to build a managed services business.
And with regard to the economy, we all know the story there. Rising fuel prices have put the squeeze on everyone. Businesses have seen costs increase while their customers have less to spend. Going “green” has become a top company initiative; rising oil prices have helped people “do the right thing” and look for more efficient ways to get the job done. We’re driving less, telecommuting more, and using high end web and video conferencing services. We’re using technology more out of necessity. We’re doing this with less IT staff and budget. All of this driving us toward a different way of purchasing IT – we want it “as a service”.
These four forces have been building to create a perfect storm for managed services. While these forces have been coming together, there has been another force holding the market back. The force of customer restraint; restraint caused by a lack of trust in providers of managed services.
Until now, we have had a steadily growing supply of managed service providers, but not a standard definition of managed services nor a standard of quality for managed service delivery. Both key in establishing customer trust. This is changing. Over the past several months, we’ve seen our industry start to come together with managed service definitions and standards for service quality. Cisco has its Cisco Powered Managed Services designations that have set a high bar for service delivery while industry experts like Michael Speyer, Forrester, have developed managed service definitions that represent the collective thinking of our industry. These developments together have been creating the perfect storm for managed services – for once, I’m looking forward to the rain!
Tuesday, May 20, 2008
Thursday, November 8, 2007
Building a Strategy from Vision & Values: “Walking the Cat Backwards”
Today, we took the learning from the past few days and put theory into action and developed our company’s vision & values (20 year) and mission & strategies (5 year) to get there. Our company would differentiate itself by having the most compelling, simple, personalized user interface. Our best marketing would be done “word of mouth” by our customers. We would partner with network infrastructure providers, access providers, and the top content providers to build our vision. We would have a company where customers and partners are our investors.
Our Vision: “delivering the most compelling online user experience, the way that you want it”. Our Values: “ROCS” = Responsible, Open, Customer-led, Simple. Our Mission: develop the world’s most compelling user interface by 2012.
Our Vision: “delivering the most compelling online user experience, the way that you want it”. Our Values: “ROCS” = Responsible, Open, Customer-led, Simple. Our Mission: develop the world’s most compelling user interface by 2012.
Tuesday, November 6, 2007
Millenials in the workplace
As leaders, you need to tell Millenials how their work fits into the future scheme of the company. Training Millenials with their multi-tasking skills and tech savvy will push training to new levels of technology. Millenials will respond well to experiential learning where they are allowed to come up with their own solutions.
Millenials want to learn: with technology, with each other, online, in their time, in their place, doing things that matter. Learning more closely resembles Nintendo, a trial and error approach to solving problems. Doing is more important than knowing. Communication, suggestions, feedback – positive and negative – need to travel in both directions.
Challenges Millenials will face include: lack of work ethic, patience with the time it takes to get things done. Understanding their relative unimportance to the “big picture” of a business. Developing true skills when changing jobs often.
Work atmosphere: Millenials expect to work and have fun at the same time… they expect work to be fun. Employers need to instill a sense of ufn in the atmosphere and create community. It helps morale and helps employees get to know each other better. Millenials will create a new culture of work, characterized by more independence in the workforce. Many of them will become entrepreneurs.
Motivating Millenials
They expect and need praise. They will mistake silence for disapproval. Expect feedback. Want lots of freedom on how, when, and where to do their jobs. Want to learn continuously. Changing jobs should be part of their daily routine.
Millenials want to learn: with technology, with each other, online, in their time, in their place, doing things that matter. Learning more closely resembles Nintendo, a trial and error approach to solving problems. Doing is more important than knowing. Communication, suggestions, feedback – positive and negative – need to travel in both directions.
Challenges Millenials will face include: lack of work ethic, patience with the time it takes to get things done. Understanding their relative unimportance to the “big picture” of a business. Developing true skills when changing jobs often.
Work atmosphere: Millenials expect to work and have fun at the same time… they expect work to be fun. Employers need to instill a sense of ufn in the atmosphere and create community. It helps morale and helps employees get to know each other better. Millenials will create a new culture of work, characterized by more independence in the workforce. Many of them will become entrepreneurs.
Motivating Millenials
They expect and need praise. They will mistake silence for disapproval. Expect feedback. Want lots of freedom on how, when, and where to do their jobs. Want to learn continuously. Changing jobs should be part of their daily routine.
Generations and the Media: The rising power of the Millenials
Had a very thought provoking conversation today regarding generations and their influence on business. We discussed the Millenials (ages 5-24) and their attitudes.
Web = OXYGEN
Community = Virtual
Perspective = Global
Career = Multiple Reinventions
Loyalty = Group
Authority = Respectful of Parents
To Millenials, everyone has a say, word of mouth marketing rules, leaders manage agreement rather than dictate. Interesting that nearly half say they are making friends all the time, one if 5 have friends they’ve never met in person, one in 3 say the internet is a great way to meet people.
The mobile phone is the center of the universe for the Millenials. They are the lifelines for Millenials. 85% of Millenials use mobile phones, 81% “can’t live without it”. 32% text message “a lot”, 18% take photos “a lot”- these are the killer apps for Millenials. They need to share and do so in real time. Millenials want to be relevant to their community, they want to express themselves. They view themselves as mini-celebrities. They aren’t influenced by big brands and real celebrities. They value authenticity and “keep it real”. Entertainment is constant communication and sharing personal content. Being connected is extremely important. Sharing is the Millenial way. Product Development question: What is the next “sharable” content? How can you get in the value chain of communication?
Millenials in the workplace
As leaders, you need to tell Millenials how their work fits into the future scheme of the company. Training Millenials with their multi-tasking skills and tech savvy will push training to new levels of technology. Millenials will respond well to experiential learning where they are allowed to come up with their own solutions.
Millenials want to learn: with technology, with each other, online, in their time, in their place, doing things that matter. Learning more closely resembles Nintendo, a trial and error approach to solving problems. Doing is more important than knowing. Communication, suggestions, feedback – positive and negative – need to travel in both directions.
Challenges Millenials will face include: lack of work ethic, patience with the time it takes to get things done. Understanding their relative unimportance to the “big picture” of a business. Developing true skills when changing jobs often.
Work atmosphere: Millenials expect to work and have fun at the same time… they expect work to be fun. Employers need to instill a sense of ufn in the atmosphere and create community. It helps morale and helps employees get to know each other better. Millenials will create a new culture of work, characterized by more independence in the workforce. Many of them will become entrepreneurs.
Motivating Millenials
They expect and need praise. They will mistake silence for disapproval. Expect feedback. Want lots of freedom on how, when, and where to do their jobs. Want to learn continuously. Changing jobs should be part of their daily routine.
Web = OXYGEN
Community = Virtual
Perspective = Global
Career = Multiple Reinventions
Loyalty = Group
Authority = Respectful of Parents
To Millenials, everyone has a say, word of mouth marketing rules, leaders manage agreement rather than dictate. Interesting that nearly half say they are making friends all the time, one if 5 have friends they’ve never met in person, one in 3 say the internet is a great way to meet people.
The mobile phone is the center of the universe for the Millenials. They are the lifelines for Millenials. 85% of Millenials use mobile phones, 81% “can’t live without it”. 32% text message “a lot”, 18% take photos “a lot”- these are the killer apps for Millenials. They need to share and do so in real time. Millenials want to be relevant to their community, they want to express themselves. They view themselves as mini-celebrities. They aren’t influenced by big brands and real celebrities. They value authenticity and “keep it real”. Entertainment is constant communication and sharing personal content. Being connected is extremely important. Sharing is the Millenial way. Product Development question: What is the next “sharable” content? How can you get in the value chain of communication?
Millenials in the workplace
As leaders, you need to tell Millenials how their work fits into the future scheme of the company. Training Millenials with their multi-tasking skills and tech savvy will push training to new levels of technology. Millenials will respond well to experiential learning where they are allowed to come up with their own solutions.
Millenials want to learn: with technology, with each other, online, in their time, in their place, doing things that matter. Learning more closely resembles Nintendo, a trial and error approach to solving problems. Doing is more important than knowing. Communication, suggestions, feedback – positive and negative – need to travel in both directions.
Challenges Millenials will face include: lack of work ethic, patience with the time it takes to get things done. Understanding their relative unimportance to the “big picture” of a business. Developing true skills when changing jobs often.
Work atmosphere: Millenials expect to work and have fun at the same time… they expect work to be fun. Employers need to instill a sense of ufn in the atmosphere and create community. It helps morale and helps employees get to know each other better. Millenials will create a new culture of work, characterized by more independence in the workforce. Many of them will become entrepreneurs.
Motivating Millenials
They expect and need praise. They will mistake silence for disapproval. Expect feedback. Want lots of freedom on how, when, and where to do their jobs. Want to learn continuously. Changing jobs should be part of their daily routine.
Following the Money: using the market to forecast the future
Equipment, long distance, and carrier companies are not being valued in the market. The market sees value in user generated content and community development.
The market value chain can be seen as constructed of: 1)Authors (NBC, Music Artists), 2)Marketing (YouTube, Facebook), 3)Distribution (Comcast, Verizon).
Authors: glut, near free
Marketing: self-service, find what you want, widgets to help you, click-competitive, advertising driven. This is where the money is!
Distributors: riddled with natural monopoly issues, huge infrastructure investments, trouble monetizing services in face of P2P Marketers…
Some thoughts on where things are going…
•One global network: the internet, minimal govt regulation (except nation-state censorship)
•Devices: many and diverse, consumer owned, interchangeable
•Internet access services: intermodal competitive (cable, fiber, wireless, WiMAX), minimal regulation, financially challenged
•Internet content hubs: search engines, social networks, megablogs
•Everything goes onto the internet backbone: voice, TV, Movies, conferencing
The need for different business models: discussed a business model framework called VISOR (Value Proposition, Interface experience, Service Platform, Organizing model, and Revenue model). Provides common language and structure to discuss alternative business models.
The market value chain can be seen as constructed of: 1)Authors (NBC, Music Artists), 2)Marketing (YouTube, Facebook), 3)Distribution (Comcast, Verizon).
Authors: glut, near free
Marketing: self-service, find what you want, widgets to help you, click-competitive, advertising driven. This is where the money is!
Distributors: riddled with natural monopoly issues, huge infrastructure investments, trouble monetizing services in face of P2P Marketers…
Some thoughts on where things are going…
•One global network: the internet, minimal govt regulation (except nation-state censorship)
•Devices: many and diverse, consumer owned, interchangeable
•Internet access services: intermodal competitive (cable, fiber, wireless, WiMAX), minimal regulation, financially challenged
•Internet content hubs: search engines, social networks, megablogs
•Everything goes onto the internet backbone: voice, TV, Movies, conferencing
The need for different business models: discussed a business model framework called VISOR (Value Proposition, Interface experience, Service Platform, Organizing model, and Revenue model). Provides common language and structure to discuss alternative business models.
Major Industry Players: What are they up to?
Google – what are they doing? They have search, googletalk, picasa, hello, google earth, gmail, blogsearch, currentTV. Possible ebay relationship? Possible Amazon.com merger?
Google acquires Postini (allows apps to be used while offline, uploads when reconnected). Works with Google apps – email, calendar, voip, word processing, spreadsheets, presenter, offers security, message archiving, encryption. San Francisco wireless umbrella, bid $4.6B for wireless spectrum, have bought tons of fiber. Very secretive. But wait, there’s more! Google entering UK wireless market in early 2008, creating Gphone and GPay, will launch multi-terabit transpacific unity cable in 2009 (low cost for Google, access to asian ISPs behind international gateways, ISP peering already begun).
They are poised to become THE Global IP Communications Company with the most compelling user interface. What does this mean for our service provider customers?
Microsoft – Yahoo Interoperability. Live Services Strategy (Mail, Search, Messenger, Voice, Video, Click to Call). SOA. Adds IPTV to Xbox 360, buys Tellme networks (voice activated response).
Cisco – buys KISS, LinkSys, SA, Vantive (mobile conferencing), Arroyo, Orative (mobile presence), Tribe.com, Five Across (social networking). Offers telepresence system.
All positioning to own the personalized customer experience for communications, entertainment, information, community.
Google acquires Postini (allows apps to be used while offline, uploads when reconnected). Works with Google apps – email, calendar, voip, word processing, spreadsheets, presenter, offers security, message archiving, encryption. San Francisco wireless umbrella, bid $4.6B for wireless spectrum, have bought tons of fiber. Very secretive. But wait, there’s more! Google entering UK wireless market in early 2008, creating Gphone and GPay, will launch multi-terabit transpacific unity cable in 2009 (low cost for Google, access to asian ISPs behind international gateways, ISP peering already begun).
They are poised to become THE Global IP Communications Company with the most compelling user interface. What does this mean for our service provider customers?
Microsoft – Yahoo Interoperability. Live Services Strategy (Mail, Search, Messenger, Voice, Video, Click to Call). SOA. Adds IPTV to Xbox 360, buys Tellme networks (voice activated response).
Cisco – buys KISS, LinkSys, SA, Vantive (mobile conferencing), Arroyo, Orative (mobile presence), Tribe.com, Five Across (social networking). Offers telepresence system.
All positioning to own the personalized customer experience for communications, entertainment, information, community.
Monday, November 5, 2007
Understanding the evolving Network Digital Industry
Stephen Shepherd led us through an interesting discussion regarding the evolution of our industry. The growth of broadband and the internet has put the customer in control (network inversion from telco controlled to customer controlled experience).
IP and Peer to Peer file sharing have caused headaches for traditional telcos as its hard to monetize the value customers are obtaining from network services (billing nightmare). New business models are necessary for the different members in the value chain to survive (Peer to Peer is viewed as evil by the entertainment industry as it enables theft of digital assets – music has been hit hard but videos should be better. BitTorrent has signed a deal to legally distribute movies).
New business models (Telco 2.0) are being debated. All focus on how to make money in an all “IP World”. Focus on alternative business models. Assume that the user is in control of the experience.
As the user is in control of the experience, the battle is on for delivering the most compelling, simple, best organized, personalized user experience. The personalized experience will be delivered as close to the customer as possible. Google is ahead with serious momentum. Social Networking companies are vying to be the one-stop user experience. Competitors are seeking to control the device in the home to deliver this personalized user experience (Apple, Microsoft, Cisco all pursuing). The battle is on for delivering the most complete, simple, personalized experience to communities and content.
Social Networking: Huge Trend shaping the industry
We discussed SecondLife and it’s relevance. SecondLife tells you who people WANT to be, NOT who they are. The companies that can successfully market to people’s aspirations, will win big. In the business world, SecondLife is being used for internal training (IBM new hire training conducted in SecondLife) as well as business meetings. People’s willingness to pay for virtual real estate is an indicator of willingness to pay for virtual assets going forward.
Facebook, MySpace, YouTube, and the like are enabling people’s desire for self-expression and sharing. People are willing to share a wealth of personal information in order to obtain a more personal online experience. Sharing builds community, makes you smarter and more tuned in.
IP and Peer to Peer file sharing have caused headaches for traditional telcos as its hard to monetize the value customers are obtaining from network services (billing nightmare). New business models are necessary for the different members in the value chain to survive (Peer to Peer is viewed as evil by the entertainment industry as it enables theft of digital assets – music has been hit hard but videos should be better. BitTorrent has signed a deal to legally distribute movies).
New business models (Telco 2.0) are being debated. All focus on how to make money in an all “IP World”. Focus on alternative business models. Assume that the user is in control of the experience.
As the user is in control of the experience, the battle is on for delivering the most compelling, simple, best organized, personalized user experience. The personalized experience will be delivered as close to the customer as possible. Google is ahead with serious momentum. Social Networking companies are vying to be the one-stop user experience. Competitors are seeking to control the device in the home to deliver this personalized user experience (Apple, Microsoft, Cisco all pursuing). The battle is on for delivering the most complete, simple, personalized experience to communities and content.
Social Networking: Huge Trend shaping the industry
We discussed SecondLife and it’s relevance. SecondLife tells you who people WANT to be, NOT who they are. The companies that can successfully market to people’s aspirations, will win big. In the business world, SecondLife is being used for internal training (IBM new hire training conducted in SecondLife) as well as business meetings. People’s willingness to pay for virtual real estate is an indicator of willingness to pay for virtual assets going forward.
Facebook, MySpace, YouTube, and the like are enabling people’s desire for self-expression and sharing. People are willing to share a wealth of personal information in order to obtain a more personal online experience. Sharing builds community, makes you smarter and more tuned in.
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