Home References What are Managed VAS services?

Managed Value Added Services or VAS essentially refers to the business practice of partnering with an external vendor with a view to delegating a part of the IT operations to them to achieve greater efficiency in operations and cost by delegating certain tasks to a third party to perform instead of assigning those to internal personnel.

As per a CISCO report, the managed VAS services industry grew to an estimated $217 billion globally, a sharp 15 per cent CAGR rise from $110 billion in 2009. The upward trend is likely to gain further momentum as organizations increase spending on Managed VAS services to avail greater operational efficiencies.

Managed value added services are finding increasing favor among operators as they realize the business benefit of concentrating on their core business. It has been noticed that leading operators are following the wider global trend toward outsourcing in order to concentrate on their core business expertise in order to provide customers with a superior experience with the objective of expanding their customer base to include more customers. Choosing to partner with external vendors for managed VAS services has become a matter of strategic priority as operators find it much more profitable to focus their limited expertise and resources on building their core competencies with a view to gaining competitive edge over other players in the market.

One of the biggest advantages to the organizations from availing Managed VAS is that it frees its internal resources for working on development and growth of business critical areas. Another big benefit accruing to businesses is the fact it is able to access and leverage the expertise, technology and resources available with a specialist in the specific domain to be able to derive maximum capacity utilization, something it might not be able to achieve due to limited expertise and resources in that area.

The benefits of Managed VAS services for business in terms of financial gain can broadly be summed up as below:

  • Helps to reduce time to market product or service leading to increased revenue
  • Reduced OpEx costs
  • Improved QoS leading to healthier bottom line growth

With an estimated 20 per cent savings in OPEX and CAPEX, there is a very sound business case for choosing Managed VAS in functions that are not core to the business.

Partnering with a vendor for Managed VAS services does not in any way imply that the organization has to give over control and ownership of the equipment, application or service to the vendor. The organization retains full control and ownership over the asset and only delegates the day to day management of the asset to a 3rd party vendor for business reasons. In fact one of the main reasons why Managed Value Added Services is slowly gaining ground over strategic outsourcing it that it enables organizations to gain access to highly specialized expertise without losing control over company owned IT asset or infrastructure. All of these make a sound case for the growth of Managed VAS services in times to come.

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