Managed services have extended beyond the traditional definition of outsourced IT services to cover managing applications stores, network infrastructure and emerging areas such as cloud computing and SaaS. Co-sponsored feature: Hewlett-Packard

David Sliter: the operator can capture the
fastest time to value

Attempting to define managed services is a moving target. “Managed services is a term that’s used interchangeably depending on the context,” says David Sliter, vice president of solutions at Hewlett-Packard’s CMS group. “There is no single definition and it is evolving into a broad category. If you think specifically of service providers and what it means to them, we see managed services as a means by which service providers can accelerate entry to new markets and offer services at new price points. We’re focused on how we can assist service providers through the discontinuity in the market and reduce their costs.”

The broadening of the managed services portfolio, coupled with the maturing cloud-based services introduces the potential of hybrid managed services composed of a blend of on-premise and off-premise personnel-based and software-based services. “The scale and automation advantages of the last few years have improved the situation to enable us to drive this to the next level,” adds Sliter. “There’s an exciting opportunity for operators to take advantage of a hybrid model. It’s not just an all or nothing model.”

Flexibility at the core

That’s in contrast to the current managed services market’s previous incarnation under the ASP tag which floundered as a consequence of high cost, unproven reliability and inflexible models. With current managed services, flexibility is at the core. Organisations can increase their usage as they wish and accelerate time to market in new business areas without the need for capital expenditure This leads to a try as you buy approach, withoutcommitting massive development spend to a particular service that may or may not work. “A managed service can start in a certain mix of on or off-premise and evolve over time with the customer having options to bring aspects in-house – or out – if and when certain trigger points are met,” explains Sliter. “That’s especially interesting when evaluating new services. By starting with a cloud based scenario to minimise start-up costs, the operator can capture the fastest time to value and later have the flexibility to re-assess in the light of in market performance.”

All this might sound a bit alien. In contrast to other major industries that have been merrily outsourcing large elements of their business for decades, the telecoms sector has traditionally focused on controlling all elements of its business end-to-end. Many have huge, expert employee-bases to draw on that have reliably developed solutions to date. However, service proliferation, the need to compete at previously unheard of speeds, and intense cost constraints over the last few years are changing that attitude. Simultaneously, technological innovations are changing the principles of network design and management as well as the services delivered over them. It’s a massive cultural and organisational shift.

“Operators have come a long way in the last five years,” says Sliter. “There are still monolithic parts but IT transformation is happening and HP, with our combined IT expertise and network capabilities can work beside and with them to provide services such as hosting while they get going. We can be very flexible because our scale and scope allows us to support a wide varietion.”

Providing such new services at first glance isn’t necessarily a traditional telco thing to do and operators aren’t alone in wanting to provide such services. However, Sliter thinks they’re better positioned than one might think even though delivery of such services might seem more aligned to software providers, resellers, distributors and the web giants. “They’re significantly better positioned than they were several years ago and are better positioned than the world might have thought,” he adds. “Component services such as mash-ups and over the top application stores are critical and it is the operators that can make component services available wholesale. They can provide services such as voice calls, mobility, data access, billing, location and basic subscriber data that the developer community can use without having to be network experts. That could be a lucrative opportunity.”

However, many operators have an even stronger position and won’t necessarily have to be confined to providing telecoms-based support for the services of others. “They’re well positioned to be the aggregator themselves,” confirms Sliter. “They are able to pull together their own component assets with other third party assets to build an end-to-end managed service offering under their own, high-value, trusted brands. They’ll be able to put together bundles of services whether they’re from the web giants or guys working in their garages. Network providers are uniquely positioned to manage that end-to-end experience.”

Sliter also points out that the opportunity extends way beyond classical services. Over the top data access models and the emerging machine-to-machine market, which sees SIM cards deployed in Coke machines or cars, are expected to exceed the number of phones and service providers will be well positioned to support this activity because of their expertise and service delivery model.

HP sees its role as an enabler of operators and thinks there are five key areas in which it can assist.

Operators need to be able to open up their services and data via APIs so aggregators can use them in a reliable fashion without needing access too deeply into the network provider’s systems. “Operators also need to be able to federate these capabilities with other service providers so that the aggregators can achieve scale across geographies,” adds Sliter. “HP has a powerful Service Delivery Platform (SDP) solution in this market that consists of pre-existing software and consulting capability that enables this federated approach and recently announced its SDP 3.0 that includes a virtual sandbox where developers can create new web-based applications (apps), widgets and mash-ups.

The second factor operators need to address is their need for operational and business support systems to manage this evolving environment which spans both the network and IT domains. HP has strong next generation OSS and BSS solutions in this market, built on its history in both IT management solutions as well as traditional network solutions. There are extremely few partners an operator could look to who can match the breadth of IT and Network skills and assets HP can bring to bear.

The operational aspect of running the target environment once built also links well into HP’s portfolio. Its data centre expertise coupled with assets from its acquisition of EDS in 2008 gives it the capability to support operator initiatives from a quick start with outsourced people in SaaS mode and the intent to transition in-house to a long-term, outsourced mode.

In addition, the convergence of the communications and the media and entertainment industries has a significant impact here. “Whether in back-end content, or in front-end device convergence, or in end-to-end IPTV solutions; service providers need to partner with someone who is active and relevant in the converged communications, media and entertainment space,” says Sliter. “HP has unique breadth in this space with our presence in converged media in terms of handsets, netbooks, IPTV, media storage and media workflow.”

The fifth and final factor is that this is a rapidly evolving space and it’s important that managed services providers keep up with what’s happening around the world. “Every operator I have spoken to is hungry for experience, good and bad, from other similar initiatives around the world,” says Sliter. “Our solutions approach, combining pre-existing software and customisation, integration consulting services and solution support services ensures we continually build on both the software intellectual property we hold and the softer skill intellectual capital from all over the globe. GTB

Real deployments

HP is involved in a wide variety of engagements across the world that serve to illustrate the breadth of managed services deployment types.

At TDC, HP has built, operates and maintains the Danish landline and mobile services provider’s value added services and intelligent network mobile environment as part of a five year contract that encompasses provision of an end-to-end capability that includes the platform, applications, new service development and launch.

Another area of growing focus in a number of European wireless operators is development testing and certification which uses the breadth of expertise within HP’s handset business to effectively remove the burden from the operator.

In Brazil, at an unnamed tier one mobile operator, HP is running a 24x7 fault management service that includes an ongoing monitoring service in addition to a pro-active service, run daily, that looks for indicator of future problems and allows preventative steps to be taken.

Sliter gives a final example of how HP is engaged in a build and operate contract with a tier one wireline carrier in South America that wanted to run a local number portability service quickly, cost effectively and at low risk. The service capability includes integration with the operator’s legacy network and IT systems and provision of an ongoing managed service on the operations side. The operator has already completed half a million successful ports using the HP operated managed services.

These examples go to show that there is real substance underlying the hype and conflicting definitions that surround managed services. “There’s massive growth and it’s not hype,” says Sliter. “It’s a journey that operators have embarked upon and, over time, each business will build out in steps leveraging managed services as the situation dictates. We don’t advocate a big bang. There’s a great opportunity for service providers to play much more of a value added role rather than simply as an access provider and HP can bring all of the assets mentioned above to help operators on this path.” GTB