The MSSP Market and Telco’s
At a period in time when margins for traditional telco services continue to erode, Telecom leaders have looked to non-traditional solutions to supplement their go-to market strategy.
A strategy adopted by the larger telcos is to invest in managed services portfolios – and in doing so, they have started to expand from their traditional enterprise focus into mid-market in the pursuit of revenue that is more easily acquired and has shorter sales cycle.
In addition, we have seen small telecommunications companies, which are agile enough to quickly onboard and productise solutions push up from their traditional SMB market into the mid-market.
The encroachment of the large and small telcos into the mid-market space has put pressure on the mid-tier telcos to look seriously at their go-to-market strategy.
History has proven that organisations that move early and adapt to change quickly come out ahead in times of crisis. Recent years have been disruptive to business, but the disruption has provided many opportunities. Defining the prominent generation of telcos in the coming years will be inspired by the leaders who act now to take advantage of the current opportunity. Not only is there an opportunity to expand into traditional managed services and create recurring income, but emerging technologies have also created an exciting opportunity.
It is fair to say business-level disruption was occurring well before the pandemic occurred. Netflix, Amazon, Uber and Microsoft became major business disruptors. But these changes will be marginal compared to the changes that will evolve from 5G, Low Orbit Satellite, IoT and AI. Telco companies are in the prime position to take advantage of this change.
It is also fair to say medium-sized Telco companies face more significant challenges than at any other time in history. The squeeze is on for medium-sized telco companies – they have smaller budgets than larger telcos and higher operating costs than the smaller telcos. These organisations must find ways to build additional revenue streams and drive customer retention that are effective and efficient but also commercially viable.
The emergence of IT, OT and IoT
It is fair to say the explosion of IoT and the integration of IT and OT has increased the revenue opportunities tenfold. Many believe we have begun the 4th industrial revolution, a time of creation. In the coming years, we will see the establishment of mammoth organisations that weren’t here only a few years prior. Some well-known telecommunication companies during this time will flourish, while others will flounder and fail—robust and decisive leadership by the organisation’s leadership teams will be the difference.
Projections show the global managed services market growing at a Compound Annual Growth Rate (CGPR) of 12.6% over the next five years. Gartner predicts the IT services for the IoT market will represent a 58 billion dollar opportunity globally by 2025. Kaspersky reported 1.5 billion IoT cyberattacks in the first six months of 2021. Statista reports endpoint security will reach a 19 billion dollar spend by 2025. The statistics can go on and on, but they all show that Managed Security Services and Managed Services are on the rise.
The world skill shortage and unprecedented growth in Cyber have created an opportunity for medium-sized Telco companies to align closely with well-established agile Managed Security Service Providers with well-defined systems and processes. In this market, size does matter. Larger Service providers are too rigid in their processes and operational costs to provide an advantage, and smaller Service providers inexperienced with the operational aspects of Telco companies will fail when it comes to service and delivery.
Exciting times lay ahead for Australian telecommunication companies, and businesses will look to their Telco organisations to guide them effectively and securely through the coming changes. The Telcos that emerge successfully from the coming changes will be the Telcos that adapt to design and build the new required solutions.
Seccom Global has been delivering Cybersecurity solutions for two decades and has a wealth of experience working in the telecommunication space.