Cisco Systems : Why customers want virtual managed services

Cisco Blog >SP360: Service Provider

Easy to buy, easy to change, and quick to get, virtual managed services take potential clients off the fence and into your balance books.

It's not news that expectations of cloud business services are changing fast. Today's companies are looking for more than just network access; they're seeking offers that deliver to all their managed services needs. For example, they might start with some basic VPNs, add direct Internet connections, add enhanced security services, and so on up through applications. The common attributes are easy to buy and quick to get, and this means virtualized and cloud managed. In a 2015 Cisco survey, 59 per cent of respondents said they would prefer to purchase a managed firewall as part of their access package, and 40 per cent were considering managed web collaboration[1].

Businesses want managed services, and are very willing to get these from a network service provider. It's creating a great opportunity for operators who can deliver them. Wide area network (WAN) users in the US anticipate further spends on managed network and security services. According to the survey, more than 80 per cent of businesses with a WAN expected to purchase managed antivirus, web and email security, Wi-Fi, and other services.

ACG Research claim the worldwide market for managed services will reach $62 billion by 2018. It's a huge opportunity, but many network service providers are struggling to capitalize. Why? You may be contending with complex network architectures with expensive custom hardware and CPE. It might take months for you to introduce a new service that may require new network equipment, plus the operations support system (OSS), and integration. Let's face it, customizing and scaling new services for specific customers and vertical markets isn't as easy as it should be.

Addressing customer concerns

Business customers are worried about their networking costs. High upfront and recurring costs? No way! Manage multiple versions of hardware and software? You have to be kidding! They want to trial new features and services to be sure they work, without having to commit to them first. Networking isn't their business; their business is healthcare, retailing, manufacturing, or whatever else. There's never been a better time to help them.

This is where Cisco Virtual Managed Services (VMS) comes in. Our VMS can help you to roll out personalized, highly secure new services, at web speed, on demand. With VMS, you can offer innovative new services in minutes, not months, using prepackaged software that's easy for your customers to personalize and purchase via your portal. And they can connect to these virtual services from the cloud using their existing CPE - less cost and risk for you.

Customers like VMS, and the research proves they value the ease-of-use, visibility and control it provides, no matter the size of the business. Seventy-six per cent of survey participants said they were willing to pay more for VMS than they would for traditional managed services[2]. Customers like the self-service portal. It lets them monitor their network, try out new services, and cancel them if and when they're not needed.

Best of all, VMS provides an excellent springboard for growth. It's a platform you can set up and deploy quickly, and that you can expand and integrate with your own applications. According to ACG Research, VMS can drive a 200 per cent increase in ROI, and enable you to expand your reach into new markets and business customer segments.

You're in a strong position to capitalize on the VMS transition. Customers want the flexibility that it can deliver, with the majority willing to switch to a service provider that offers a VMS-like solution[3].

Find out more

To learn how a virtualized approach to service delivery can help your organization, visit http://www.cisco.com/go/vms.

[1] Cisco GSP-SPTG, U.S. Businesses, December 2015
[2] Cisco GSP-SPTG, U.S. Businesses, December 2015
[3] Cisco GSP-SPTG, U.S. Businesses, December 2015