The traditional network provider role played by operators has given them the basis to move confidently beyond network management services to security and application management, and soon, mobility services
Service providers have made their intentions clear in the last few years - banishing the image of being mere pipe providers and setting their sights squarely on getting as close to managing the enterprise desktop as possible.
The traditional network provider and data-center hosting role played by service providers has given them a basis to move confidently into network management services, security and increasingly application management and soon, mobility services.
As a mature market in the region, Hong Kong has witnessed this trend emerge strongly in the past year. Managed services and IT outsourcing growth for 2006 over 2005 is expected to reach 6% to 7% for Hong Kong, compared to the 12% overall growth for Asia Pacific, according to Adrian Ho, research manager for managed services and enterprise networking at IDC.
Hong Kong's overall growth in managed services has been slower than in emerging markets due to its more mature marketplace. But Ho added that its maturity means it is more likely to lead in adoption of emerging services like managed security and mobility services.
'Markets like Australia and New Zealand are always first to pick up on new technologies and services, with Hong Kong and Singapore closely behind,' said Ho. Service providers should expect further interest in security, mobility and applications such as IP telephony, he added.
Bandwidth hunger
While much of the talk this year has been on managed services, the traditional banker for service providers - bandwidth - has shown continuing growth. Across the board service providers have indicated that bandwidth requirements are going up for both large and small companies.
'This last year has seen even higher bandwidth demand, more data services and 100-Mb connections have now become Gigabit or even 10-Gigabit connections,' said Michael Lee, VP of information and communications technologies at PCCW. Lee noted that many firms are upgrading or building out datacenters and require higher throughput fiber-based connections. While SMEs may not be as advanced in their demands, they have also increased their bandwidth requirements. 'At first SMEs just needed network access, basic broadband for email and Internet access,' said Lee. 'But now they are hosting websites and using the web as a medium for business with customers and partners.'
'Bandwidth requirements are always going up as firms want to run more applications, but in many cases, companies are not making use of all the bandwidth available to them,' said Eric Chan, general manager of business development and planning at Hutchison Global Communications (HGC).
Chan believes that most firms could be adding new applications and use up spare bandwidth rather than simply adding more capacity. 'Often the networks are not optimized for the applications which result in wasted bandwidth,' said Chan.
PCCW's Lee noted that applications are becoming more complex and as a result require more bandwidth and better levels of resiliency and security. 'This is driving the migration from traditional point-to-point leased lines and ATM networks to high-speed IP-based infrastructure,' he said.