Why Care About Cloud Managed Services?

Here in Cisco’s Cloud and Managed Services, or CMS, we think a lot about the value proposition for the managed services offerings we bring to market. Obviously, we try to create managed services that help augment Cisco’s networking, collaboration, and data center products and that allow us to be successful in the product market. Much more than that, though, we are trying to address very specific pain points that our customers experience in trying to maintain and grow their technology infrastructures and ultimately their core businesses. Market research is very clear about these customer pain points and help point us to opportunities waiting to be uncovered in these challenging situations.  Our Managed Services Solution Overview provides a deeper dive into the value of managed services for IT infrastructure management.

Very Clear Challenges for Our Customers

• Most if not all of our customers are constantly fighting two opposing IT-related issues—they need to keep their IT infrastructures running optimally, which is expensive, and they also need to keep costs in check.
• Powerful new enterprise technologies are hitting the market every day. These technologies are very promising and can radically transform the way their knowledge workers carry out their work. Technologies that are this transformative can be overwhelming to an organization, though, because they need to be understood, implemented, and maintained. This takes top-notch IT talent, ongoing training, and time. All of this is very expensive to the enterprise.
• Perception in the market is everything. Corporations do not want to project the image that they are downsizing and outsourcing, because very often this is interpreted by the market and investors as a warning sign and indicator of weakness in the core business. Therefore, companies can be convinced to continue a go-it-alone strategy even when that course of action is more detrimental than bringing in third-party support.
• Keeping capital and operational expenditures in check can hamper growth and technology adoption. Study after study shows that a healthy company maintains its investments in the IT infrastructure and capabilities and that this positively impacts the core business and bottom line. The urge is to curtail capital spending on assets and to reduce operational expenditures, but at what cost to the core business?

 What’s Wrong with IT?

IT departments are one of the largest—if not the largest—cost centers within the enterprise. IT has a single charter, which is to maintain the most stable, robust, and secure IT infrastructure for employees to leverage and grow the business. This is not an easy task—just ask your director of IT or CIO—she’ll give you a long laundry list of reasons why this is so. Too many obstacles stand in the way of maintaining and adapting IT services. The following are just a few of the things that keep IT directors and CIOs awake at night:

• While a top-notch IT infrastructure is a competitive advantage and a huge asset to the core business, enterprises often look at IT first as a starting point for reducing costs, personnel, and investment.
• Even if the enterprise refrains from cannibalizing IT’s budget, IT directors are looking at a very healthy job market. Finding the right personnel who have the experience to maintain and grow your IT capabilities takes time and money. This is a shared obstacle between IT and human resources, but it’s one that takes the focus away from running the networks, providing the most advanced software services, and enabling a truly collaborative environment for knowledge workers.
• It’s almost a cliché to say that technology is changing rapidly. The curve when representing the rapidity of change is ludicrous and truly nearly exponential. Even the largest enterprises are struggling to keep up with technology change, so when we think of our entire customer base—service provider, large enterprise, small enterprise, and commercial—we know that most of them are banging their collective hands on the mats. And we want to help.

Safety and security of data, data services, and customer information plagues the thoughts not only of IT directors but also the executive staff and board of directors. Providing everything we’ve been talking about with a level of information security that keeps regulators away is the one of the most expensive propositions of all.

Market Forces Are Equally Influential

Larger market trends are buffeting IT departments. These are forces that are so outside of their control that often the trends seem to control IT. Some of these trends are very promising and can be mined for IT efficiencies and improvements. Others are just technologically complex and need to be better understood before IT can even make a call on viability. These trends include:

• Budget shifts to the lines of business (LOBs). In order to try to be more nimble and “start-up-ish,” companies are shifting budgets and decision-making authority on IT spend away from centralized IT and to the LOBs and business units (BUs) themselves. IT is losing control while at the same time still having to answer for the entire IT infrastructure.
• The Mobile and Digital workforce is making additional demands on the infrastructure. Workers are bringing their own devices (known as BYOD), using multiple or many at the same time, and using them not only from the centralized office but from the branch, the home office, and the road. No longer can IT assume that a well-wired or robust wireless network in the office suffices for knowledge workers. Access from anywhere, at anytime, is the new mantra, and IT has to keep up or the company loses precious time and potentially business.
• Anything that takes IT or workers’ attentions away from the core business threatens the bottom line of sales and revenue. And with everything I’ve been talking about, this all has the potential to massively defocus IT and your knowledge workers, even if it’s just a short outage.

How Managed Services Can Help

This is where we come in. Cisco’s CMS is dedicated to attacking these problems by lending critical support to the enterprise. Our methodology is built upon three pillars—people, processes, and tools.

• We have the most highly trained and technically proficient network engineers and technologists available. We hire and train the best, and we continue to make the investment in our people. When you decide to partner with CMS, you know that you are augmenting your internal staff with the best IT minds—and eyes—on the market. And you want those well-trained eyes to watch out for all these dangers lurking in your IT infrastructure.
• We follow a global standard of IT services operations and delivery, known as ITIL. ITIL principles guide our every move, so when you partner with CMS you know that your IT operations follow the most efficient and methodical processes available. Our personnel go through rigorous ITIL training and certification because we know your enterprise and the IT industry demand a controlled process when operating and maintaining your IT services for your workers.
• Cisco is the global leader in networking, collaboration, and data center technologies. Our business units make massive investments in R&D to create emerging devices and software tools to empower your workers. We use the best tools available—most of which are our own—so that we can always attack the problem with the right tool.
• Our capabilities allow you to transform your enterprise more rapidly. Because you can depend that CMS teams have the know-how to help you maintain and monitor any emerging Cisco-powered technology, you can adopt new technologies much more quickly without the steep learning curve that in-house IT staff must overcome. If it empowers your workers, then we can help you get it in their hands and assure its optimal performance.

The Bottom Line

A Markets and Markets study of the global managed services industry points the way to some very promising claims. When an enterprise leverages credible managed services to augment their own operations, they can see expenditure reductions (CAPEX and OPEX collectively) of up to 40%. At the same time, the enterprise can create incredible efficiencies in supporting, maintaining, and growing the IT infrastructure, upwards of 50% or more. These are significant reasons for you to consider partnering with CMS and our full spectrum of managed IT services.

Conclusion

Much of this is a cursory examination that we are expanding into a forthcoming white paper. Look for that in the near future, or talk to your Cisco representative about Cisco’s Cloud and Managed Services. Doesn’t your core business deserve it?

For an in-depth look at why you should care about Managed Services, read our Managed Services Solution Overview and visit CMS on Cisco.com.