While technology vendors look to cutback on production during the difficult economic situation, many of these vendors are looking to service providers (xSPs) to help them compete in the market.
A survey* by the Dataquest unit of Gartner found that 66% of companies are using, or plan to use over the next year, external professional services vendors to help them bring new products to market.
"After years of furious spending and building out for public network and Internet infrastructure, some providers are publicly announcing a retrenchment in capital expenditures," said principal Dataquest IT analyst Eric Goodness. "What has not been related in these announcements is that these same carriers will increasingly look to external professional services companies to help them develop, support and manage their core infrastructure to aid them in bringing new services products to market."
The predominant focus for service providers (commonly referred to as xSPs) has been on communications and infrastructure services, such as telecommunications, network service providers (NSPs) and Internet service providers (ISPs).
However, the emergence of application service providers (ASPs) has extended the xSP model into a higher level of the customer value chain by directly addressing business and consumer interests, such as business process and function sourcing.
"The xSP acronym is a representation of a larger market space that refers to a wide-ranging category of service providers, of which ASPs are just a small element," Goodness said. "Like applications, many other support services and IT capabilities are offered over the Internet as 'sourced service.'
"Because of features such as monitoring, active administration and automation from an external, shared environment, xSPs offer access to best-of-breed services and applications that leverage the cost efficiencies of a one-to-many business model that is service fee-based, such as subscription or utility-type fee structures."
Network consulting and business planning looks to be the hottest growth property on the professional services map. Increasingly, service providers are looking to provide added value to their customer engagements and will need expertise to identify target markets, determine optimal architectures and craft next-generation operations and billing support systems.
"Historically, telecommunications organizations relied primarily on internal staffing to effect changes to the core network or to create new services products," said Goodness. "Use of third-party professional services vendors is often relegated to installation activities as part of network build-outs.
The increased numbers of competitive operators, such as mobile, satellite, and competitive local exchange carriers (CLECs), and emerging xSP models have changed the way most operators consider using third-party organizations. External services vendors offer access to additional expertise and may help reduce operating expenses."
* The Gartner Dataquest report 'xSP Network Services: Are you xSPerienced?' presents the survey results from 61 North American services providers including xSP participants from various sectors.