The dawn of managed services in the Middle East

Driving down capex and opex

Finesse, a managed services provider with a strong focus on application management, support and maintenance services for the financial sector, is seeing rising demand for a full range of outsourced banking process services, back-office systems and data management services.

According to Sunil Paul, COO at Finesse, the trend is driven by businesses’ efforts to eliminate the high capital and operating expenditure needed to keep IT infrastructure management in-house.

Paul added that the region’s IT skills shortage and competition for top-quality staff, combined with the significant up-front and ongoing expenses of deploying and refreshing in-house systems, are also key influences on the shift towards managed services.

Managed services vs outsourcing

Abou Moustafa, vice president of enterprise managed services and solutions at Du, one of the region’s leading mobile providers, said it is important to distinguish between IT managed services and more traditional types of outsourcing, which often involve the transfer of assets to the third party.

“The adoption of managed ICT services leads to cost savings, frees up a company’s IT staff – or avoids the need to recruit specialists – and makes the best use of available resources,” Moustafa said.

“We see strong and continuing growth as organisations focus on global collaboration, and managed services providers will play an ever increasing role [in supporting this].”

As enterprises across the region transform themselves into digital businesses, the accompanying need for cloud hosting, security, connectivity and collaboration will make the Middle East a prime market for managed service providers capable of delivering network-based services and apps, according to Nehul Goradia, vice president at value-added distributor Optimus, which offers a range of managed infrastructure, business applications and network services.

Goradia said that emerging trends such as SaaS heighten the questions surrounding loss of control, company data privacy, corporate information security and operational risk.

“However, enterprises here are also on a steep curve of embracing technology such as mobility and cloud to enhance business functions and results,” he said. “This leads to a greater appetite for taking calculated operational risks.

“And if managed service providers can educate customers on the business potential of technology and allay security fears, they can significantly grow their market share.”

However, the take-up of managed services might face resistance from CIOs and IT leaders who see the them as a threat to their traditional IT setup or even their job.

Security bellwether

Although security is only a small subset of the managed service providers market, it is one of the best gauges of potential growth in the Middle East.

Stephan Berner, managing director at security specialist Help, said security event management, incident response and remediation services will drive the waved  managed security services adoption in the region.

“While providing 24-hour security monitoring, providers will take informed decisions related to any kind incident,” Berner said. “This addresses one the major challenges most enterprise and government organisations are facing today, which is the lack resources and skillsets to combat the fast-changing security threat landscape seven days a week, 24 hours a day.”

Saeed Agha, general manager at Palo Alto Networks Middle East, agreed. He said a successful managed service provider will be the one that finds a perfect balance between managing client expectations and a robust business model that sustains their services.

“The increasing complexity effectively dealing with cyber security risks and complex regulations is causing many organisations to consider managed security services,” he said. “Effectively addressing this opportunity depends on selecting a security platform that enables a profitable business model.”