Broadband triggers managed services boom

Network monitoring and intrusion detection management, as well as basic security procedures such as content filtering, managed firewalls and private networks, will provide the ammunition the managed services industry needs to evolve, expand and succeed, industry representatives claim.

Confident that the managed services industry has a strong future within the Australian SME landscape, representatives from Pacific Internet, Microsoft, WebCentral and ExpressApps also suggested the increasing level of broadband take-up was the catalyst presenting new market opportunities for managed services providers.

The comments were made at the Service Providers Association (SPAN) meeting on the emergence of managed services through the evolving broadband market, held in Sydney on Wednesday.

Microsoft Asia-Pacific regional hosting and security specialist, Phil Meyer, said managed service providers could play a vital role in the SME space by providing security-related services to the market.

He identified software patch management solutions as well as overall security protection and network reliability as key areas for managed service providers to address.

Pacific Internet managing director, Dennis Muscat, said managed service providers had benefited greatly from the increased take-up of broadband services in the SME space.

However, he predicted several preconditions would need to be met before the managed services industry flourished. Among these were 80 per cent broadband penetration of the SME market with services boasting at least 512Kbps access speed capabilities.

At present, SMEs were nowhere near this level of take-up, Muscat said, pointing out some of the findings of Pacific Internet’s most recent Broadband Barometer report.

According to the report, 41 per cent of SMEs were using a residential ADSL product (such as an entry-level 256Kbps plan), instead of opting for a specific business-grade broadband service.

“256Kbps is baby broadband,” Muscat said. “We need business grade services uptake. [The industry] can’t deliver managed services without business grade reliability.”

In addition, ISPs needed to address the affordability issue of broadband, he said.

“$60 to $100 per month at business entry-level is the ideal price point,” Muscat said.

Finally, ISPs must focus on business solutions and customer solutions – not on winning the most number of customers, Muscat said.

Again referring to the Broadband Barometer report, Muscat highlighted VPNs, and security monitoring as examples of such solutions demanded by SMEs today.

Broadband delivers

Web Central CEO, Lloyd Ernst, said the Application Service Provider (ASP) model made as much sense today as it did when first heralded as an IT solution for the SME market.

“In 2000, the concept of an ASP made sense: managed service, no servers, no hassles, and no security issues for the customer. We’re promoting the ASP model in exactly the same lines as four years ago,” he said.

But the SME market’s overall reliance on slower dial-up or ISDN connections, immature Web-based application interfaces and the lack of architecture connectivity back in 2000 proved a major challenge to the managed services industry, Ernst said.

What makes the managed services solution more compelling for SMEs today is both their reliance on the Web as a business tool, as well as the maturity of applications operating across the Internet, he said.

For example, rich Web interfaces similar in capability to desktop applications were becoming more common.

Web-based applications were also increasingly becoming faster and more responsive like desktop applications thanks to the uptake of broadband, he said.

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