PeopleSoft is the latest vendor to jump aboard the managed services bandwagon. Recently it announced a comprehensive service for all its ERP product lines. The application management services will be available for all Enterprise, EnterpriseOne and World products and will include maintenance, administration, end-user and extended services.
The high complexity of ERP, CRM, and SCM and companies' corresponding drive to reduce complexity in the enterprise is making managed services one of the hottest growth areas in high tech. According to Steve Earl, director of hosting strategy at PeopleSoft, the benefits include predictability, accountability, one contract to sign and flexibility.
"The service is flexible. It can be a full solution with an SLA or a discrete service in the IT resource pool," Earl said.
Managed services usually fill holes in enterprise skills as well. Companies adopting application management outsourcing have done so on the presumption that costs will be the same or less, said Michael Doane, senior vice president at Meta Group.
"The top reasons address a lack of resources and the ability of the enterprise to then dedicate their focus on their core competency," Doane says.
While PeopleSoft is offering the service for its own applications, other major service suppliers such as Hewlett Packard are set to extend managed services to the midmarket.
Next year, HP will offer HP Ready Office, which will include internet access, VoIP, and help desk calls via subscription.
IBM, which offers a similar desktop management service to the midmarket, two weeks ago announced the IBM Lotus web Conferencing Service.
While the midmarket appears to be ripe for managed services, Symantec has found an enterprise niche with its managed security services.
As security breaches through viruses, worms, and other intrusive ploys grow more sophisticated, so do the firewalls and IDSes used to stop them, leaving customers short on the expertise and resources to maintain network security.
Managed security services offer sophisticated correlation technologies that analyse data coming in from as many as 50 firewalls and IPSes they might have in their network, said Grant Geyer, vice president of global managed security services at Symantec.
Meta Group's Doane called managed application services an immature market. "There are no repeatable solutions, and pricing is different from deal to deal," Doane said.
Paige O'Neill, senior director of on-demand services at Oracle, said managed services is the fastest growing part of Oracle's business.
"It is growing anywhere from 70% to 80% a year," O'Neill said.