90% of Asian companies choose managed services to fix IT problems, says NTT Com

13 April 2018 | Natalie Bannerman

NTT Communications has revealed the results of its multi-market survey examining why Asian companies use managed services to fix its IT problems.

The survey titled Asia Firms Partner to Capitalize on Innovative Services for Future Growth, explores why managed services providers (MSPs) are used in Asia, particularly Hong Kong, Indonesia, Malaysia, the Philippines, Singapore and Thailand, to fix a number of in-house IT issues, as well as by CIO looking to expand outsourcing and technology projects over the next 18 months.

Asia-Pacific has been identified as the world’s fastest managed services market and it has been predicted to grow from $28.03 billion to $64.01 billion by the year 2021. The region is also expected to see the highest global compound annual growth rate at 18%, beating North America and Europe at 7.7% and 7.2% respectively.

Executives from the businesses surveyed cited three main challenges when it comes to managing IT in-house. 59% said that security was the biggest challenge, while 51% said people was the next biggest challenge, followed by lack of IT skills at 50%. Security and cloud infrastructure were found to the most outsourced technologies coming in at 58% and 55% respectively. Over the next 18 months outsourcing of both is expected to grow to 66% and 74% respectively. In addition, approximately 50% of organisations outsource systems and applications management, which is expected to grow by 10% over the next 18 months.

In the cloud space hybrid cloud remains low with only 18% of companies admitting to using the technology, but more than half of participants expect to deploy it over the next 18 months.

“While businesses are migrating to public cloud for cost benefits, most are required to retain key user data in the private cloud for compliance reasons. Although hybrid cloud is an irreversible trend, building and managing a hybrid cloud environment in-house has become increasingly complex and challenging,” said Dave Scott, solutions director at NTT Com managed services.

Regionally, Singapore leads the way in hybrid cloud with 58% of its companies considering deploying the technology, followed by Hong Kong at 33%. Half of Asian businesses are considering deploying SD-WAN over the next 18 months.

“7 out of 10 large-scale transformations fail , which explains why businesses see global managed services partnerships as a strategic move to improve their chance of success - addressing opportunities and obstacles in technology integration, talent scarcity, skills shortage, and operational excellence,” added Scott.

Lastly the report found that while roughly 60% of businesses manage more than six IT vendors, most respondents claim that complexity leading to performance issues at 56%, complexities of vendors work together at 54%, and the high cost of using multiple vendors 53%, are the major concerns in a multi-vendor IT environment.