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Strategies For Selling More To Smes: Analysis Of Demand For Broadband Managed Services And Service Bundles

Product Type: Market Research Report
Published by: Analysys Mason
Published: February 2007
Product Code: R51-229
Description
Between now and 2011, the number of small and medium-sized enterprises (SMEs) buying broadband access for the first time will fall year on year, as broadband penetration of SMEs approaches its limit. Growth in customer numbers will slow dramatically and competition will continue to drive prices down. As a result, the value of the SME market for broadband access will reach a peak, then start to shrink. At the same time, the increased broadband penetration in the SME market will fundamentally change the way companies buy telecoms and information technology (IT) services. Given the rising costs and increasing complexity of managing IT services in house, SMEs are already becoming more open to buying a range of managed IT, software and communications services.

An opportunity exists for broadband providers to drive new revenue growth through selling broadband managed services to SMEs. However, competition among providers of broadband managed services is increasing, customer requirements are exacting and establishing credibility can be a hurdle for providers to overcome.

Underpinned by a survey of SMEs across France, Germany and the UK, Strategies for Selling More to SMEs: analysis of demand for broadband managed services and service bundles reveals what kinds of broadband managed services SMEs are buying, what types they want to buy and how they prefer to buy these services. The report provides detailed forecasts of SME spend on broadband access and broadband managed services for five countries (France, Germany, Italy, Spain and the UK), as well as for Western Europe as a whole, and recommends actions for various types of operator and service provider. Case studies of European and North American operators and service providers are included to illustrate how these companies are targeting the SME market for broadband managed services.

The report considers a range of managed service types, including:
  • IP Centrex
  • IP PBX
  • other VoIP services
  • IP VPNs
  • Web-site hosting
  • email
  • Internet security (such as virus and spam protection and firewalls)
  • data storage, archiving and back-up
  • desktop management
  • software as a service (SaaS, also known as managed software, on-demand software and application service provision (ASP))
  • Web conferencing
  • surveillance, monitoring and closed circuit TV.
Strategies for Selling More to SMEs: analysis of demand for broadband managed services and service bundles answers your key questions.

How big is the SME market for broadband managed services?
  • What types of broadband managed services are already being offered and what types do SMEs actually want?
  • Will SMEs buy service bundles or do they prefer to buy services individually?
  • Do operators need to provide fully integrated, own-brand managed services or is it sufficient for them to act as a channel for a third-party provider?
  • What strategies can operators use to maximise revenue from SME broadband customers?
Table of Contents

Executive summary

Introduction, scope and methodology

Status of the SME broadband market

Broadband managed services and service bundles

Case studies

Actions




Figures and tables




Figure 1: Proportion of SMEs with broadband access in major Western European markets, December 2005

Figure 2: Proportion of SMEs with broadband access in major Western European markets, 2006-11

Figure 3: New SME broadband subscribers in Western Europe, 2006-11

Figure 4: Average annual spend on broadband access per SME in Western Europe, 2004-6

Figure 5: SME spend on broadband access in major Western European markets, 2006-11

Figure 6: Growth in SME spend on broadband access in Western Europe, 2006-11

Figure 7: Types of broadband access used by surveyed SMEs

Figure 8: Broadband speeds used by surveyed SMEs

Figure 9: Types of broadband upgrade that surveyed SMEs expect to purchase in the next two years

Figure 10: Types of service level upgrade for which surveyed SMEs would pay a premium

Figure 11: Proportion of SME spend on broadband access in Western Europe attributable to broadband upgrades, 2007-11

Figure 12: SME spend on broadband upgrades in Western Europe, by upgrade type, 2007-11

Figure 13: Amount of SME spend on broadband access in Western Europe attributable to broadband upgrades, 2007-11

Figure 14: Proportion of surveyed SMEs using broadband managed services, by service type

Figure 15: SME spend on broadband managed services in Western Europe, by service type, 2006

Figure 16: Proportion of surveyed SMEs with definite plans to start using broadband managed services, by service type

Figure 17: Growth in SME spend on broadband managed services in Western Europe, 2007-11

Figure 18: Proportion of surveyed SMEs not willing to buy non-voice-oriented broadband managed services from their broadband providers, by service type

Figure 19: Addressable SME spend on broadband managed services in Western Europe, by service type, 2006 and 2011

Figure 20: Addressable SME spend on broadband managed services in major Western European markets, 2006 and 2011

Figure 21: Growth in addressable SME spend on broadband managed services in major Western European markets, 2006-11

Figure 22: New addressable SME spend on broadband managed services in Western Europe, 2007-11

Figure 23: Addressable SME spend on broadband managed services versus SME spend on broadband access in Western Europe, 2006-11

Figure 24: Types of broadband provider from which surveyed SMEs prefer to purchase non-voice-oriented broadband managed services

Figure 25: Addressable SME spend on non-voice-oriented broadband managed services in Western Europe, by type of broadband provider, 2011

Figures 26a-c: Addressable SME spend on non-voice-oriented broadband managed services in Western Europe, by type of broadband provider and service type, 2006-11

Figure 27: Proportion of surveyed SMEs preferring à la carte services versus those preferring bundled services

Figure 28: Proportion of surveyed SMEs preferring to buy from a single supplier versus those preferring to buy from multiple suppliers

Figure 29: Proportion of surveyed SMEs currently using broadband managed services (buyers of service bundles versus à la carte buyers), by service type

Figure 30: Proportion of surveyed SMEs planning to use broadband managed services (buyers of service bundles versus à la carte buyers), by service type

Figure 31: Addressable SME spend on broadband managed services (buyers of service bundles versus à la carte buyers) in Western Europe, 2007-11

Figure 32: Addressable SME spend on broadband managed services (buyers of service bundles versus à la carte buyers) in Western Europe, by service type, 2011

Figure 33: Proportion of surveyed SMEs preferring to buy service bundles versus those preferring to buy à la carte, by business size




Table 1: Broadband managed services included in the survey of SMEs

Table 2: T-Systems Business Services revenue, by type, 1Q-3Q 2005 and 1Q-3Q 2006

Table 3: F-Secure revenue and net profit, 2005-6

Table 4: Hostopia revenue and net profit, 2003/4-2005/6

Table 5: Salesforce.com revenue and net profit, 2003/4-2005/6

Table 6: Webex revenue and net profit, 2004-6

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