Connecting the enterprise: Managed services have come of age

Many organizations have come to the unpleasant realization that the network solutions they have in place just weren’t built to do what they need to do today. These legacy solutions worked in their time, but the world kept spinning and business evolved. Many factors have an impact now that may not even have existed, or been as crucial, as recently as five years ago. Some handy examples: cybersecurity concerns have ramped up, the distributed workforce has become an accepted reality, there is a worldwide shortage of skilled IT workers, and cloud computing has become an everyday expectation.

While some of the legacy solutions that remain helped many enterprises previously, the solutions they relied on to meet the circumstances of yesterday just aren’t sustainable. Additionally, there are hidden costs accumulated by relying on outdated technology. Older solutions generally require more time to work through standard processes than those using updated technology.

Organizations of all sizes, across industries, need to consider the capabilities of their networks and applications in terms of the outcomes they require, both today and tomorrow. For instance, many organizations still rely on a mix of proprietary systems such as collaboration apps and older voice systems for their communications. This often results in a siloed and fragmented experience requiring employees to manually toggle between applications to complete tasks. 

Besides ensuring that networks and applications are up and available, IT leaders are expected to understand how support for requirements such as cybersecurity, the Internet of Things, artificial intelligence, and cloud computing factor into the efficiency of their company’s operations. Many are investigating services, given the solutions available today that can answer many of their questions.

The case for managed services

The use of managed services is becoming more commonplace every day. The Managed Services Global Market Report shows that spending will grow 46% by 2027. Outsourcing IT infrastructure and its management alleviates costs for CIOs and provides them access to human and technology resources that may not exist within their organizations.

With products and services that are flexible, smart, and ready to evolve with needs, a managed solution may be the perfect balance of quality and affordability. It can open the door to enterprise-level networking with the sophistication required to meet current and future challenges without overburdening IT resources.

Staff shortages, skillset gaps and increasingly complex network infrastructure are prompting IT leaders to take a serious look at managed services. At the same time, managed services have evolved to give companies options for maintaining control of mission-critical capabilities while addressing talent and technology challenges. This combination of greater needs and more flexible service models is driving interest in alternative paths to acquiring the skills and technology required by digital transformation.

Business networks are often based on legacy MPLS solutions that result in fragmented topology. IT personnel often spend hours maintaining disparate networks. Managed services such as SD-WAN can help solve this challenge, freeing up IT teams by transitioning responsibility for network administration to their technology partner. With managed services, IT departments can keep up with rapidly evolving connectivity needs without investing in costly equipment that quickly becomes obsolete. They can extend the capabilities of their IT staff, by enabling expanded focus on the organization’s strategic goals. Meanwhile finance departments benefit from predictable, and typically lower costs, simplifying IT budgeting and introducing flexibility across other functions.

CapEx vs. OpEX

Another key benefit of using managed services involves the opportunity to fund communications from the operating expense (OpEx) budget. When businesses purchase or build and maintain their own infrastructure, the cost is accounted for as and funded from its capital expense (CapEx) budget. Broadly defined, OpEx applies to standard, regularly occurring business expenses, whereas CapEx is used for more strategic and irregular investments. The advent of managed services that include equipment owned by the technology partner but used and funded by businesses as part of a monthly service fee has changed the communications cost model. This approach enables businesses to acquire required technology and expertise via OpEx while retaining limited CapEx to fund more strategic investments aligned to their core business capabilities. 

Managed SD-WAN networks that include hardware provided as part of a monthly subscription fee are an example of a managed service that can be funded via OpEx. With this approach the service provider owns the equipment, meaning that there are no more unpleasant surprises or scrambling to find budget by the business using the services when a piece of equipment fails. In addition, complex and time-consuming software license management and updates are the service provider’s headache to manage under this approach, extending another efficiency gain to IT leaders. 

Another compelling argument behind the managed services OpEx model involves equipment depreciation and obsolescence. When a business does not have to buy hardware, it avoids placing a depreciating asset on their balance sheet. Technology is evolving so quickly that equipment can become obsolete prior to being fully depreciated, requiring businesses to pay off and replace useless infrastructure. 

Managed services across the board

Increasingly, IT leaders are finding that managed or co-managed solutions are preferable to self-managed solutions. Managing solutions in-house typically require more resource allocation to handle the ongoing management complexity that comes with upgrading and integrating disparate equipment.

Organizations should avoid managed service providers who don’t integrate network connectivity with key capabilities such as security, unified communications, SD-WAN, WiFi and hardware. Providers that do not provide enterprise grade customer support, transparent SLAs, or a complete range of connectivity solutions offer limited value irrespective of managed services capability. Organizations can now get their technology services in one robust solution  delivered by a single partner that makes network modernization easy.

Our Managed Workplace Package brings together your secure connectivity, SD-WAN, unified communications, equipment and network management in a single solution — all accessible through a single portal that extends enables service level visibility and control — allowing you to focus on what matters most, running your business.

Going to Enterprise Connect?

Visit us at Booth #1819. We’d like to hear what you think about the viability of managed services in today’s environment. If you like, we can discuss how our Managed Workplace Package can enable secure, seamless collaboration for your distributed in-office, remote or hybrid workers — and keep them connected and productive no matter where they are.