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Managed Service Providers to Outperform

According to the latest IDC Asia-Pacific (excluding Japan) Enterprise ICT Outsourcing and Managed Services Forecast, the market is expected to exceed $29.5 billion in 2008, an 11 percent increase over 2007.

IDC expects value added managed services -- or discrete outsourcing -- to outperform the market with 16 percent growth, reaching $9.1 billion in 2008.

"Despite the drumbeat of economic and corporate earnings coming out across the world that points to an economic slowdown, we continue to be cautiously bullish that the industry can withstand the headwinds of a slowing economy" said Adrian Dominic Ho, Research Manager for IDC's Asia-Pacific Managed Services and Enterprises Networks.

Cost savings continue to drive the outsourcing and managed services industry, which explains its resiliency. However, IDC expects a slight slowdown in business transformation engagements due to the growing economic uncertainty.

Despite this, organizations are still eager for true and real innovation and it is here that will provide some of the richest prizes for the managed service provider industry. According to IDC, the managed converged communication market will be the fastest growing engagement in 2008 with an annual growth rate of 26 percent.

Over the next 12 months, IDC believes that some of the major transformation themes that will feature strongly include the continued standardization and migration to an all IP converged platform.

"The real innovation here is the introduction of messaging and collaboration tools from video conferencing to instant messaging, " adds Adrian, "Enterprises believe an effective communications strategy is becoming vital and are looking for unified communication solutions to be integrated into their desktop and IP-transformation managed services engagements."

IDC believes that datacenter managed services will continue to feature prominently in the years ahead. Managing a datacenter is one of the biggest pain points for today's IT managers as a result of the escalating cost associated with it.

"The cost of managing datacenters has reached breaking point but fortunately there are technologies out there from virtualization to power and cooling that can help." adds Adrian, "Enterprises are looking for service providers that can deliver a holistic approach and solution in an outsourced and hosted model to resolve their datacenter issues."

With consolidation and centralization of datacenters, IDC also believes that application performance delivery across the WAN becomes another critical factor. Managed WAN optimization and load balancing are some of the emerging forms of managed services that are being derived out of datacenter consolidation activity.

In 2008, IDC expects datacenter-managed services to grow by 18 percent.

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