Advance: MSPs outline revised customer priorities in Southeast Asia, size up services growth

Introducing Advance, an interactive virtual roundtable series housing viewpoints from leading partners across Southeast Asia

Partner success in the months ahead will be dependent on premium service delivery and enhanced customer engagement, amid plans to reposition Southeast Asia for future growth.

Central to such efforts will be the deployment of collaboration, security and SD-WAN technologies, shaped by managed service providers (MSPs) and underpinned by revamped digital transformation agendas.

That’s according to Advance findings, a newly launched Channel Asia virtual roundtable series housing leading partners throughout ASEAN. During the launch session, featured providers included NTT; Logicalis; Insight and Cloud4C Services, alongside Acuutech; ArkPhire and Total eBiz Solutions.

Launched in early August, Advance is a centralised editorial resource designed to help partners access forward-looking content as the Southeast Asian market attempts to reposition for growth. Delivered on-demand, the platform facilitates channel collaboration through access to real-time, relevant and local analysis, complemented by virtual events and research.

Despite ongoing Covid-19 challenges – triggered by the uncertainty of lockdown measures, government stimulus packages and customer budgets – partners are seeking to move the conversation forward to focus on short- to medium-term priorities.

Hence Advance, launched with the aim of helping partners search for pockets of opportunity – and revenue – in the months ahead.

State of Southeast Asia: accelerated demand for managed services

Services adoption - irrespective of company size or solution preference - is exploding across ASEAN, triggered by customers embracing new ways of consuming technology.

While the region remains in a somewhat embryonic stage compared to more advanced markets globally - such as the US, UK and Australia - the digital dial is shifting as local businesses seek outsourcing expertise to drive transformation plans, counterbalanced with rising cost and business model considerations.

Such a dynamic is placing MSPs at the heart of strategic change in Southeast Asia, with services adoption set to skyrocket in the months ahead.

“Managed services adoption will definitely accelerate as organisations consider an agile technology sourcing model to help expedite business model transformation,” outlined John Lombard, CEO of Asia Pacific at NTT. “As enterprises seek to recover from Covid-19 and restore business operations, they are expected to turn to service providers that go above and beyond the delivery of tactical IT solutions to deliver positive business outcomes.

“Organisations are also struggling with the change of pace of skills in the industry and are unable to hire specialised skills in-house. Hence, using a service provider effectively will ensure that they have the latest skills and service expertise across diverse technologies."

Echoing Lombard’s observations, Tsu Pheng Lim - CTO of Asia at Logicalis - believes such an increase in services demand will accelerate further during the next 6-9 months, triggered by heightened digitalisation efforts at both national and regional levels.

“Amidst the unknown economic variables brought on by Covid-19, one thing is certain; organisations are now embracing digital transformation in everything they do at an accelerated pace,” he explained. “More than before, businesses need to create a differentiated experience for their customers in the digital marketplace."

For Tsu Pheng, customer survival will be dependent on the creation of new business models and structures, supported by the strategic roll-out of emerging technology solutions.

Yet only a select group will have the resources to finance such efforts - cautioned Tsu Pheng - with customers hampered by increased technology complexity, demanding line of business divisions and legacy systems. Not forgetting the rising challenges related to how IT is consumed, heightened cyber threat levels and lack of expert resources to support modernised infrastructure.

“Managed services solutions that are scalable, reliable, future proof, expertly managed and provide predictable monthly costs at the same time, will help organisations lower IT costs, improve security and compliance while significantly enhancing operational efficiency,” Tsu Pheng added.

Delving deeper, Hitesh Bhardwaj - vice president of Cloud4C Services - cited cost pressures and access to technical expertise as key factors in the turbo-charged demand for outsourcing ASEAN-wide, irrespective of company size or sector.

“Due to the Covid-19 scenario playing out longer than expected, we are all witnessing demand for goods and services falling for most of the traditional businesses,” he explained. “To conserve cash and transform their businesses at the same time, organisations are accelerating to leverage cost-optimised, managed services models.”

The ‘new normal’, according Bhardwaj, also requires the provision of agile and dynamic services platforms to end-user, whether to book a cab, buy a financial or insurance product online or simply to order food or shop online.

“These services must be always on,” he said. “The technical skills to build, run and maintain these new services consumption platforms are in short supply and difficult to retain. We are seeing strong demand from businesses which are already online and using the 'new normal' to build even more robust business models. We are also seeing traditional businesses, starting to transform, to prepare for the future."

Maintaining the resourcing theme, Hitan Mehta - CEO of Asia at Acuutech - acknowledged that organisations are seeking to “maximise bang for buck” in the short- to medium-term due to a dwindling pool of local and accessible talent, combined with access to in-depth solution expertise.

“MSPs use automation and knowledge across multiple clients to manage at scale, meaning it's in a modern MSPs interest to automate to reduce operating expenses and pass on the benefits to customers," he advised. "I believe this approach will continue to accelerate, therefore traditional system integrators and maintenance type providers should start to explore becoming an MSP or working under the wings of an MSP."

For Bijjala Radhakrishna - CEO of Total eBiz Solutions - Covid-19 has triggered a rise in customers seeking to engage specialist MSPs rather than carrying out IT functions in-house, allowing the business to focus on core priorities instead.

“This allows customers to focus on strengthening their vision and strategy in responding to pandemic and post-pandemic situations,” he advised. “Their key priorities will be to consolidate managed services rather than adopting a piece meal approach. Customers are not just looking at infrastructure or applications because more requirements are emerging in relation to remote working, security and cloud."

Customer priorities: technology

In the short-term, and perhaps unsurprisingly, customer priorities remain anchored around collaboration, SD-WAN and security - placing new services demands on MSPs as a result.

“Work-from-home has now become a norm rather than an exception,” confirmed Tsu Pheng of Logicalis. “In Singapore, during the circuit breaker period, 80 per cent of the white collar workforce was working from home. Even though some last minute adjustments had to be made, most companies were coping fairly well.”

With customers deploying collaboration tools such as Cisco Webex, Microsoft Teams and Zoom with relative ease, Tsu Pheng forecasts a shift in focus post-pandemic as businesses prepare to build out layered modern workplace strategies.

“As companies re-imagine the future of how and where we work, considerations regarding how to continue and sustain daily operations with minimal face-to-face interactions will require a wider spread of technology to enable such operations,” he stated. “This includes paperless offices; smart secured home offices; effectively running virtual workshops and product demos with customers and performing work while using personal devices securely anywhere."

Organisations tasked with selecting the most appropriate collaboration platform, understanding the deployment process, training end-users once adopted and managing the suite of solutions on a 24/7 basis face a challenging undertaking however, especially those operating at small to mid-sized levels.

Read more on the next page...

Page Break

“That’s a lot to figure out,” Tsu Pheng cautioned. “Plus, the future of work will also place additional strains on cyber security through heavier loads on VPN, multi-factor authentication for basic zero trust security and device and remote access management. No future of work solution should be executed without considering every aspect of security and compliance.”

Aligned to the belief that adoption of remote working tools is a “given” due to the current environment, Mehta of Acuutech stressed the importance of “secure collaboration” in the months ahead.

“Security will remain key and the alarming facts continue to point this out,” he said. “If positioned well, secure collaboration will be the future but none of this works without the network.

"In response, we have bolstered security offerings as well as awareness training around security in Southeast Asia. From a collaboration standpoint we aggressively voice enabled multiple clients with new customers also leveraging this functionality through popular collaboration tools.

"Meanwhile in the medium-term, we are focusing on hybrid cloud, specifically around Microsoft Azure Stack where we have built deep expertise to enable deployments faster and more consistently through our own custom-built automation and enablement tools, under the banner of Acuutech MESH."

Specific to NTT, Lombard said customers are increasing investment in security, collaboration and SD-WAN technologies, with the ability reduce cyber risk now cited as the leading factor for businesses when selecting a service provider.

“Investment in managed security services is set to become more critical over the coming 18 months,” he outlined. “The explosion of working from home coupled with an uptick in BYOD has caught the attention of threat actors and enterprises are struggling to defend themselves against a complex threat landscape."

Against this backdrop, 55 per cent of businesses highlighted reducing security risk as the most important service currently delivered by an MSP, according to NTT findings.

“As such, organisations are expecting an increased need for cyber security and IT support skills over the next two years,” Lombard continued. “Organisations are also looking to implement SD-WAN as a leading technology project.

“SD-WAN allows organisations to push WAN services to remote workers, extend policy changes, security updates and other centralised activity directly to them. This ultimately improves performance and user experience by gaining visibility of corporate assets and data across the network, while reducing traditional telco costs.”

In consensus with the market, Bhardwaj of Cloud4C Services reinforced that collaboration, security and SD-WAN technologies will form the “building blocks” of the new environment in which customers now operate.

“What is emerging as key is also how customers use some of these enablers to build future services,” he said. “We’re seeing multiple businesses consuming cloud infrastructure but not really optimising the consumption and spend on the chosen cloud platforms.

“Skills are limited within customers in relation to how best to leverage and optimise building blocks like cloud and security. It’s like buying a brand new sports car and only driving in first or second gear - there’s just so much more you can do. Sometimes you need a skilled driver - who you can trust - by your side."

Customer priorities: new requirements placed on MSPs

In assessing the evolving role of the MSP in Southeast Asia, Bhardwaj also stressed that despite a shift in customer priorities, the fundamental elements of service delivery remain unchanged.

"What’s changing is the types of services," he highlighted. "The solutions and technologies behind these services that customers are adopting to ensure services to their end customers continue to be differentiated.”

As result, Bhardwaj reported strong uptake in services related to DevOps as online platforms continue to develop new offerings, in addition to security and cloud-based considerations.

“It’s almost impossible for a medium-sized business to build a completely robust, secure environment, manage it in house and keep the costs in check,” he added. “We are also starting to see customers become more comfortable in moving business-critical enterprise resource planning [ERP] applications such as SAP to public cloud platforms.”

For Lombard of NTT, significant market change is occurring through end-users transitioning away from traditional outsourcing to “smart sourcing”, an approach which allows businesses to remain agile and flexible during uncertain economic times.

“Smart sourcing is a new approach to the way organisations and service providers form relationships that goes above and beyond the delivery of tactical IT solutions,” he outlined. “It’s about nurturing long-lasting relationships with service providers who can deliver business outcomes aligned to the goals of the entire organisation.

“As MSPs, our contracts with customers are increasingly measured against actual business outcomes such as total cost reduction, end user adoption, lead time to process reduction and overall transaction growth. In addition, our contracts are consumption based with very low lock-in and even allow clients to drive co-development.”

Citing NTT research, Lombard said 45 per cent of organisations globally will "outsource more than they insource" during the next 18 months, motivated by a designed to prioritise risk mitigation, business continuity and cost savings.

“Risk mitigation takes the form of searching out an MSP that aligns the consumption models to the business needs,” he explained. “For example, multi-vendor partnerships are key to risk mitigation, so companies are not locked in with one vendor.

“Ensuring business continuity requires that MSPs have the necessary safeguards in place to be implemented at a moment’s notice, minimising the impact on the delivery of services. For example, we successfully transitioned thousands of desk-based employees into an efficient and secure remote working environment within weeks across Asia Pacific.

“Lastly, with the pandemic changing the way business operates day-to-day, reducing cost is a key priority. This can be accomplished by shifting to a remote or hybrid work force to allow for office rental savings.”

Due to Covid-19, IT investments are now viewed as more strategic than previously, creating a knock-on impact in terms of MSP selection criteria.

“MSPs have to evolve from a technology advisor to become strategic partners that are viewed as nothing less than indispensable,” Tsu Pheng of Logicalis advised. “Customers no longer just want to buy a box of bandages at the cheapest price. They want a family doctor who proactively monitors their health, advises and prescribes ways to enhance their well-being, as well as cures and nurtures them back to health when they are sick.”

In response, Tsu Pheng said MSPs must to pivot to delivering measurable outcomes versus delivering on features and functionalities, centred around optimising operations, empowering employees and engaging customers, in addition to transforming products, minimising downtime and reducing churn.

“Successful MSPs have to provide a complete offering including a diversified portfolio of technology and services that delivers the perfect ‘panacea’ at just the right point in the customer journey through their entire lifecycle,” he outlined.

Channel Asia Advance is a centralised editorial resource designed to help partners access forward-looking content as the ASEAN and Indian markets attempt to reposition for growth.