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Huawei and Ericsson Drive Competitive Advantage in the Managed Services Market

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ABI Research has affirmed Huawei and Ericsson are the ones to watch as the Network Managed Services market heads toward USD18 billion by 2019.

Their economies of scale and performance advantages reinforce and grow their dominant market positions. This groundbreaking research reviews over 50 managed service portfolio line items, factors in 10 major performance areas, and aggregates into three game-changing strategies for leadership: Operational Excellence, Product Differentiation, and Customer Intimacy.

"Operators everywhere face the challenge of compressed margins and growing costs," says ABI Research's Joe Hoffman, Practice Director, Networks, "and by using managed services, they can simultaneously reduce operating expense and improve customer facing performance." In addition, it's not just cost reduction, but gaining benefits from the managed service provider expertise. Future growth areas include converging Mobile, Wireline, IT, and Networks silos and the expertise needed to succeed with SDN and NFV.

Companies do well if they can succeed with one of the three broad leadership strategies, and do very well to perform on two. Both Huawei and Ericsson nail Network Fundamentals (Operational Excellence) and leave little room for their competitors. "Ericsson lays claim to Service Depth (Product Differentiation) with its expansion of managed service offerings," adds Hoffman. "In addition to Network Fundamentals, Huawei leads with Change Agency (Customer Intimacy), and we note its outstanding record of retaining its managed service clients."

Although Huawei and Ericsson compete in the super-heavy-weight division, they still have to keep watch on Nokia Networks and Alcatel-Lucent as they hope to "float like a butterfly, sting like a bee" looking for opportunities and lapses in the leaders' performance.

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Tags: huawei  ericsson  managed services