Tuesday, November 2, 2010

What are services?


Just for those that are not aware the term services within the telecom sector fall in three categories; professional services, technical services and managed services.

Professional services incorporate network consulting (including planning and design), systems integration (including network migration, or “transformation”) and network optimization.

Technical services are made up of deployment services (including installation and commissioning), operational maintenance (including repair and replacement), support (including help desk and troubleshooting) and educational training sessions.

The market term of the day being Managed Services is network outsourcing, hosting and managed application support.

It is interesting to see that many within the telco vertical often relate to these facets of services and fail to realize that they are the result of a product development life-cycle methodology. The misnomer for those firms within the telco arena are the strategic implementation of those services, mainly by the OEMs, to the “other” vertical markets, i.e. utilities, transportation, infrastructure, etc…

The adaptation of these services to the “other” markets is not functional. This is due to the fact that these types of industries utilize a project and construction management methodological approach; meaning they are hierarchical in execution and usually relate to capital costs (capex) associated with deployments and opex for long term operations. With the telco space being a product development framework it is essential to its success that it be cyclical in nature, thus does not translate to the “other” markets when developing and delivering telecommunication based services.

Another important point is the fact that the Tier 1-3 operators have a revenue-based model only. The vertical space clients typically are not a solely revenue based operation. A good example would be utilities, or more specifically, the transportation segments. These verticals utilize revenue and tax based sources of funds to help maintain and operate their business models. They primary goal is to support their respected services to the overall national footprint, not its shareholders alone.

One must keep this in mind as the convergence starts to gain speed and the markets start to become tight. If your model is to convert the organization to a services approach, and you wish to expand beyond the shrinking telco market space, then you will need to consider these points if deploying telecommunication “services” as a Communication Solutions Provider.

Let me know if I can help. 

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