Thursday, November 04, 2010
If You Can’t Differentiate on Price…
It looks as though the Indian market is experiencing the same type of managed services shake-up that rocked Europe this time last year. You can read Light Reading’s take on inroads Huawei and ZTE are making at the expense of some European giants here. I have to say that news of ‘upstarts’ besting more established market players for these deals no longer phases me. What caught my eye in this story though, was a comment from an analyst at Ascentius Consulting: "A key difference between gear and managed services markets is that price difference is inconsequential. Managed services require a lot of sophistication and expertise, and the Chinese players are at a disadvantage."
Certainly the ability of Chinese companies to emerge from the bidding process victorious seems to counter any notion of being at a disadvantage but I digress. That’s not the part that interests me. It’s the idea that price and product have become commodities, and that differentiating one vendor from the next in the managed services arena boils down to the ultimate value gained by a carrier or operator.
We’ve talked before on this blog about the importance of the service and supply chain in building a successful managed services strategy. And if you think about it, so much of the value a client can derive from a managed services engagement (better CapEx ratios, faster time to market, capitalize on emerging market opportunities,etc.) has its roots in the efficient and cost-effective movement of surplus and decommissioned material. Of course, getting the most out this equipment requires having access to lifecycle data on products from OEMs large and small. But once you’re armed with that intelligence, it’s easy to become an expert on managing multi-vendor gear, and in turn, develop some pretty sophisticated frameworks capable of maximizing the revenue potential of those assets for your client.
