Ovum: Managed services hold great potential for wholesale providers

Wholesale service providers may be best known for providing raw bandwidth to other service providers, but analyst firm Ovum believes they can increase their revenue growth potential if they add managed services to their service portfolio.

Although Ovum says wholesale managed services market is "still immature," it is an area with "much growth potential." By offering managed services, Ovum believes that wholesale service providers can establish greater customer loyalty, improve margins and encourage longer-term contracts.

Paris Burstyn, Ovum senior analyst and author of the report, said that while the wholesale managed services market is "is only just starting to take shape but we expect carriers to quickly move beyond commodity bandwidth to providing value added services" such as security and data centers.

But traditional wholesale service providers aren't the only ones that will benefit from branching out into managed services. Ovum believes that Web 2.0 type providers (social networking, web applications and even video sharing sites) can also take advantage of this trend.

"While Web 2.0 enterprises only represent a small portion of the current market, they can use wholesale carriers' managed services to deliver applications, content and other products to their customers, allowing them to focus on their businesses while the wholesaler runs the foundation network," Burstyn said.

For more:
- see the release

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