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Asia/Pacific Gears-up for Overall Growth in Value Added Managed Services

Value Added Managed Services (VAMS) are expected to drive overall growth and unveil opportunities for vendors as per an IDC report. The report revealed that the biggest growth in demand for managed networks in 2006 would come from China, which is forecast to grow by 47.3 percent compared to 2005. Thailand is a close second at 46.5 percent, while India and Malaysia are expected to register growth rates of 25.2 percent and 22.6 percent, respectively.

The overall managed services market in the Asia-Pacific region excluding Japan is forecast to grow at a five-year compound annual growth rate of 16.3 percent to reach USD 28.4 billion by 2010. This year alone, the demand for managed services is expected to drive market spending to USD 17.8 billion.

"Asian enterprises are faced with a twin problem of lowering cost of running an IT infrastructure and keeping abreast with ever changing technology," said Adrian Ho, Research Manager for IDC’s Asia/Pacific Managed Services and Networking Research. "A well crafted managed services strategy and proper due diligence in selecting a managed service provider can go a long way in resolving these problems."

Key insights of the Managed Services Market include:

Emerging managed services such as managed security, managed converged networks and managed mobile solutions have gained most traction. Enterprises in Australia, Korea and Singapore are usually early adopters of such emerging services and their behavior usually predicts the future trend in the region.
PRC, Malaysia, India and Thailand are expected to lead growth in 2006. These emerging markets will experience high growth rates in managed networks as enterprises in these countries slowly warm to the idea of engaging an external third party to manage their networks. Moreover, these countries are turning to managed services to alleviate the "growing pains" brought about by increasingly complex networks as a result of the infrastructure build up over the past years.
Managed network services will continue to be the largest VAMS engagement in 2006. IDC expects growth in 2006 to be close to 18% reaching USD 2.7 billion. Web hosting, managed application performance and hosted application management will follow with value worth USD 870 million, USD 565 million and USD 485 million respectively.

The following screen grab depicts Asia/Pacific (excluding Japan) Managed Services Market by Country Forecast, 2006:


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