Managed services growth
ConvergenceAsia staff
04/07/2007

Cost savings continue to be the primary reason why enterprises engage in managed services, according to IDC's latest IT Services and Managed Services End User Survey.

"Our surveys have shown that squeezing out more cost savings continue to be an obsession of many enterprises this year." said Adrian Dominic Ho, research manager for IDC's Asia/Pacific Managed Services and Enterprise Networks. "Enterprises are recognising that a managed services engagement not only leads to cost savings but also gives them access to technology that enables them to transform their IT infrastructure that can drive productivity and increase their business competitiveness."

According to IDC, the Asia Pacific (excluding Japan) Enterprise ICT Outsourcing and Managed Services market totaled US$23.3 billion in 2006 and is expected to reach US$36.2 billion in 2012, with a compound annual growth rate (CAGR) of 9.2 per cent. Value Added Managed Services (VAMS) is expected to grow from US$6.4 billion to US$12.6 billion during the same period, with a CAGR of 13.9 per cent. Enterprise Wide Outsourcing (EWO) will grow from US$4.8 billion to US$6.7 billion, with a CAGR of 6.8 per cent.

"The outsourcing and managed services industry has successfully re-invented itself over the past couple of years to meet the increased demands from enterprises and technologies that have entered the market place," added Adrian. "Enterprises are looking for scalability, ease of customisation and process flexibility. Service oriented architecture, open source and x86 have played a big part in allowing service providers to meet some of these demands."

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