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In December 2007, IDC, an Australian-based company that provides global market intelligence and advisory services for the information, technology and telecommunications field released a report titled 'Australia Small Medium-Sized Business 2008 Top 10 Predictions: Give Me More Broadband' in which they outlined the transformation of Australia's small and medium-sized businesses (SMBs) in the coming years. IDC believes that the supply side will mostly drive the transformation through the services and telecommunications providers that will finally start to offer products suitably designed for SMBs. IDC believes that a lack of adequate offerings, especially on the services side of information and communication technology markets have restrained SMBs in their embrace of technology to date.

According to IDC, the situation is on the verge of changing with the progress of tier 2 service providers that better understand the needs of SMBs, complemented by the increase in availability of faster broadband internet connections, which they say will allow a whole range of services to be delivered remotely at satisfactory performances.

Jean-Marc Annonier, is a specialist in economic analysis and modelling and is research manager for IT spending at IDC Australia. He believes that around a quarter of SMBs currently use IT outsourcing services.

"Although this proportion could potentially be much higher, this will require a substantial amount of education from the provider community to convince business managers of the benefits of managed services as well as overcoming the current concerns of IT managers associated with managed services; loss of control, ability to deliver, security etc," he says.

"The role of the IT manager, as we know it today, will certainly change in tomorrow's business environment. The new IT manager will be strongly business orientated with little technical expertise but with a strong taste for IT strategy. They will be in charge of defining the digital future of the business, and in tomorrow's world this function will be mission critical."

Annonier adds that to achieve this, the 'new' IT manager will heavily rely on their managed services providers, who will need to cater not only for the traditional outsourcing services but also consulting and integration services that will be pivotal to the success of the IT strategy.

"The SMB market, and especially the midmarket above 50 employees, has become the subject of a lot of attention in the last 12-18 months, with a multitude of product announcements from all vendors targeting this space. The saturation of the enterprise space and the resulting slow growth are driving all players, large and small, into the SMB space.

"While a lot of trials and misses will occur and vendors are working on getting the right formula for their SMB offering, the window of opportunity remains widely open but could close fairly quickly as SMB specific products are increasingly hitting the market. Managed service providers will play a critical role in the channel space for larger services and software vendors looking at marketing their SMB offering," he says.

At Fujitsu, Matthew Rushton, manager of Infrastructure Services Business Development & Sales Operations, says that the Australian managed services market is pretty mature, which he believes is a good thing for both customers and vendors.

"You don't see many 'virgin' outsourcers, and customers are generally in their second or third generation, which shows there is a sound appreciation for the benefits managed services offer.

"Organisations want greater flexibility to gain competitive advantages in their core business areas; they just want IT to work. There is more pressure on CIOs and IT departments; they want to free up resources to focus on adding even greater value to their business, easing these burdens and tackling the challenges of upgrade and integration as technology changes are driving the growth towards managed services," he says.

Rushton says that managed services are a known cost, known outcome and low-risk outsourcing option, even at a time when IT capital expenditure and support costs are escalating and it's difficult to attract and retain skilled staff.

"We [Fujitsu] take full responsibility of the integration, continuous improvement and evolution of IT assets and business applications. We have the professionals to enhance and manage the value of application portfolios, reduce the total cost of ownership, increase return on IT investments and align IT initiatives with business priorities," he says.

Kaseya, a global provider of information technology automation software for IT solution providers and corporate IT organisations, recently launched the next-generation framework of their IT automation software. The new framework has been designed to deliver maximum scalability for up to 5000 machines, while providing automated IT service functionality, which the company says will properly ensure IT services support the business.

Tim R Dickinson, country manager ANZ for Kaseya, believes this latest framework is the most comprehensive release of the software to date.

"It includes technology that supports Macintosh OS X, user state management, Intel vPro processor technology and enables customers 'green IT' initiatives. It also delivers an application programming interface that makes it easier for technology partners and other third parties to tightly integrate their software with the Kaseya framework for improved service to common customers."

Dickinson says that it is important in 2008 to have IT service functionality because of the rapid growth in broadband.

"IT continues to become more critical for organisations of all sizes. IT growth facilitates greater employee and staff productivity, in the LAN environment or for remote users while out of the office.

"IT service functionality lets administrators proactively perform the daily tasks required to have their computer networks operating at optimal performance 24/7, instead of having an entire IT staff focused on reacting to problems as they emerge," he says.

Kaseya's executive vice president, APAC, Martin Ashby adds that it's important for IT companies to manage their IT infrastructure because businesses rely on IT infrastructure more than ever before.

"Keeping systems up with a minimum time between failures is critical," he says. "Lack of regular network maintenance and a robust IT management tool can cause loss of IT service, which in today's world means loss of customers, dollars and brand loyalty.

"Managed services can enable companies to increase the effectiveness of their infrastructure and system management by increasing cost efficiencies and improving the security and stability of the technology environment. Adopting a managed-sized services solution can increase the security and efficiency of SMB organisations significantly," he says.

"By implementing managed services, companies are able to streamline system administration and lower IT costs, increase organisational security and reduce downtime, boost organisational productivity, improve help desk and system support as well as increase proactive network and system administration."

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