Ziad Salameh, Services Director, Cisco Services, Middle East, Turkey, Pakistan and Afghanistan, discusses how this transformation will impact the way organizations consume services and outlines how the market for services opportunities is set to change in the near future.
Organizations around the globe are feeling the pressures of high customer expectations, increasing competition, lower operating budgets and a constant need for skilled people to maintain complex networks and help assure services.
These issues are being exacerbated by the explosion of mobile data and IP video traffic, causing capacity bottlenecks, performance issues and at times, even outages.
Given these fundamental changes, the network related professional services market is going through a massive realignment, which is likely to impact the way organizations buy services.
According to IDC’s worldwide network consulting and integration services (NCIS) forecast for 2011–2015, the NCIS market reached $22 billion in 2011 and is expected to grow at a Compound Annual Growth Rate (CAGR) of 9.6% over the forecast period to $31.2 billion by 2015. Of that figure roughly 60 per cent comprises
integration services activities.
Through this forecast period there is likely to be a shift from manual integration activities to more strategic consulting-led services. This migration will be driven by the use of automation and intelligence acquired from the devices and networks.
This migration process is characterized by taking people-intensive processes and distance out of the services model and replacing these elements with software. Driving the transformation from simple reactive services to proactive predictive end-to-end services is achieved by leveraging vendor intellectual capital allowing for scarce resources to be redeployed in higher-value engagements.
CXOs should understand that this new wave of services that leverage network intelligence will have a profound effect on the business and its interaction with vendors. This means that organizations will have to approach investments in equipment and services in a different light and look at the end-to-end business impact of the service experience.
As far as the market for network-related services is concerned, this can be categorized into network consulting and integration services, managed services and maintenance services.
Moreover, as the increasing number and variety of devices requesting access to the enterprise network continues to rise, they bring with them greater complexity
in meeting different user requirements and traffic patterns. Network traffic is increasing exponentially, and the challenge for the enterprise is how to make sense of it.
Changing the way enterprises consume services
In the future, organizations will undergo several changes that include a transition away from time and peopleintensive service activities, thereby allowing IT departments and services organizations to leverage resources more strategically. ICT staff can then focus on issues such as increasing collaboration, which will be one of the key drivers of business growth over the next five years.
There will also be a move towards intelligent, proactive services as all indicators point to the importance of the network within the enterprise, where organizations will demand more from their suppliers. In this scenario, we see the current model (based around selling product and associated services) shifting to a new type of model, where the supplier will become more involved in addressing business issues.
The evolution of the services industry will be disruptive to the way products and services will be purchased in the future causing a paradigm shift away from the traditional consumption model of ‘product plus service’ to a newmodel of ‘product bundled with service’.
By moving to a model that leverages architectures and embedded intelligence within the network, organizations can focus and invest in growing revenue. As a result, enterprises will need to rethink the way they purchase networking equipment in the future. Not simply as a collection of devices that perform a task, but with a more holistic view of the network that will allow enterprises to utilize their networks as a competitive, innovative business asset.