Summary Bullets:
- 2015 was characterized by increased support for IT services and traction regarding vendor strategic ambitions related to VoLTE, small cells, vertical markets, and embarking on SDN/NFV commercialization
- As LTE build-outs reach completion in a number of regions, operators have turned their investment to improving capacity, density, and the user experience
- Managed services contracts continued a steady pace, although operator demand for value creation within engagements leaves work to be done for vendors
While the industry begins its ramp-up to Mobile World Congress and another year of services engagements, aimed at technology migration and network transformation, it’s a good time to look back on the year that was in vendor services support. The year in professional and managed services was characterized by continued growth of IT services and increased traction for vendor strategic ambitions including VoLTE, small cells, vertical markets, and SDN/NFV commercialization. With regard to IT services engagements specifically, solutions that accounted for a quarter of overall activity in 2012 now make up over half of the service engagement tracking database at Current Analysis.
the way, we’re excited to see the road ahead.
Before diving into some of the more interesting trends from the 2015 year in services, it’s important to do some housekeeping. While we maintain an extensive database of services engagements at Current Analysis, we are restricted to tracking the contracts that are publicly announced. Accordingly, while announced contracts have fallen during each of the last four calendar years, the number of publicly announced deals, by itself, doesn’t tell the whole story on the health of the overall telecom services market. The premise of our market tracking has always been that chronicling the capabilities announced and types of services delivered represent the most important insights into how vendors should be evolving their portfolios to best adapt to evolving operator demands.
Operators Look Beyond LTE Build-outs: As many regions complete the initial stages of LTE network build-outs, operators have increasingly turned their investment attention to improving coverage, flexibility, and the user experience. Along those lines, vendors reported services support for LTE-A, small cell, and VoLTE deployments at a greater rate than the previous year. As more networks reach this point and beyond, expect the diversity of wireless services requirements to continue to expand.
IT Services Support Rises to the Occasion: As the necessity for OSS/BSS transformation and cloud architecture migration in operator networks has increased, so too has the prevalence of IT services engagements in the Current Analysis database. In some ways, this represents 2015 being the year when the predictions for Telco IT convergence started to “make good” on an industrial scale. With current and next-generation technologies requiring more advanced IT systems and back offices to fully harness, operators at large are in transformation mode. Accordingly, we see this trend gathering even more steam in 2016.
Time to Expect More from Managed Services? While managed services engagements more-or-less continued a steady pace historically, the details of those engagements and indications from vendors seem to point to an increased focus on managed solutions going forward. Managed and “as-a-service” offerings in support of analytics, VoLTE, and small cell shared the limelight as operators look to take advantage of next-generation concepts while possibly deferring some capital investments. As operators are being challenged to chase user experience improvements rather than cost per bit reductions, demand for a different type of managed services has risen. While there will always be an element of cost reduction in managed service engagements, delivering increased value will be a focus moving forward.
While 2015 saw ample change in vendor services portfolios, 2016 is expected to deliver even more transformation as the new Nokia, the Ericsson-Cisco partnership, and Huawei grapple for the lead in professional services. With increasing network complexities, end-user demands, and developing technologies, the call for diverse services support will only grow. With an improved line-up of competitors leading