The Seamless Enterprise

Comprehensive news and discussion of enterprise communications and converged network solutions.

Managed, Hosted Services: How are They Different?

on December 06, 2011 by Editor

The distinction between hosted and managed services is a persistent question, and one that the recent Sprint-Nemertes Research webinar, “The Bona Fide Value in Managed Services” answered quite well.

If you didn’t get a chance to attend the webinar, you can still catch the archived version here. This webinar offered insight from several different angles on the managed services question, with the objective, industry-wide viewpoint of Johna Johnson of Nemertes Research, the user viewpoint of Joseph Carpico of Energia Logistics, and the Sprint view from our own Mike Cole.

As to the managed-hosted question, Johnson addressed that right up front, with a handy side-by-side comparison that highlighted differentiators such as these:
•    Ownership: With managed services, the customer typically owns the communications equipment; with hosted, the provider owns it.
•    Location: With managed services, the equipment will typically reside on the customer’s premises; with hosted, it’s basically “out there somewhere.”
•    Upgrades: With managed services, upgrades and their timing are typically controlled by the customer; with hosted, the provider calls all the shots.
•    Maintenance and troubleshooting: These are generally the provider’s responsibility in either instance.
•    Response and Reach: Hosted generally has an advantage of faster implementation and greater resiliency and support – although that depends in part on the level of managed services employed – but managed services have a greater global reach than hosted.

There’s really no “winner” here, because it isn’t a question of managed versus hosted services, but more a case of which one fits a company’s needs better in specific instances … or how a mix of both can be implemented throughout the enterprise for greatest advantage.

Based on Nemertes’ figures, Johnson noted that nine out of 10 companies are currently using managed or hosted services in some form. That number is expected to climb even further in the near future, according to Nemertes. As would be expected with that level of current saturation, the greatest growth will come from companies extending their use of these services. For example, 40 percent of companies surveyed by Nemertes earlier this year expected to add more services in 2011.

As far as what drives companies to embrace managed or hosted services, the two big ones are cost savings and what might be called the “outsourcing of expertise.” So many companies either lack sufficient staffing to manage and maintain their networks or lack the expert knowledge on their staffs to adopt and handle new technologies. They see managed or hosted services as a way to circumvent the long and sometimes painful processes involved in finding and hiring the right people or providing extensive training to existing staffs.

Anyway, almost 70 percent of companies say it was a lack of staff or lack of expertise that drove their decision to employ managed or hosted services. Fifty-five percent said cost savings was the big driver. Lesser but notable reasons were increased agility, desire for greater reliability, and lowered risk.

Grabbing lunch at your desk today? Why not add a side dish of useful managed services information by listening to the webinar while you dine?


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About the Author

The editor of the Seamless Enterprise oversees the content of the blog, as well as writes individual posts on issues related to convergence, network management and security, collaboration, mobility and connectivity. Editorial duties are secondary to the editor's main job, which is engineering, designing, marketing, and managing network services for the enterprise.

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