Nortel steps up

Managed services are attracting increased interest in the Middle East and Nortel is just one of the global players eager to grab a foothold in this lucrative market.

“First, I think it’s important to note that the Middle East is a very important region as far as Nortel is concerned. One of the trends we are seeing globally is that this region and emerging markets as a whole are growing much faster than the more established or mature markets,” says Calum Byers, vice president global services EMEA, Nortel.

Byers estimates that revenues from managed services in EMEA comprise more than a quarter of Nortel’s overall revenues from the region. “We are seeing the revenue change and grow as we evolve in terms of these services. Our background in these offerings began mainly with the back-end but gradually that has changed as we become more involved in the application side,” explains Byers.

According to Byers, Nortel is observing a lot of growth in enterprise managed services as well as in services aimed at network operators. The services being requested by clients include assisted operations and network optimisation.

The strategy Nortel is using is two-pronged as it looks at the enterprise space and carrier space respectively. “We have operated in the enterprise space for a while now where we have a very strong relationship with a number of end customers, which is many times a result of the fact that we provided strong products. What we are increasingly looking at doing is putting a wrap around those products in terms of additional services,” says Byers.

“On the carrier side, we have a number of engagements with telecom providers in the region, where we have gone in and delivered the products but now we are adding managed services on top of this. We can put people on the customer premises to manage that particular service and to optimise that particular network, manage it locally and to make sure that the service level agreements are fully reached,” he adds.

Much has been made of the current financial crisis being felt globally but Byers believes that while this may prove a challenge to developed markets in terms of managed services, it will not affect this region as it remains typically greenfield in nature.

In terms of challenges that the firm faces with managed services, Byers points out issues related to skills as well as the geographic size of the region. “For a service provider the challenges include delivering a consistent level of service across so many countries and such a wide area. In addition, although there are employees with the relevant skill sets there is a significant lack of depth of knowledge,” Byers says.

Byers believes that from a client perspective a significant psychological jump often has to be made when outsourcing services. He says that with the managed services paradigm having shifted from all-encompassing long term agreements to shorter more service specific agreements, users are required to take a holistic viewpoint.

“We have to keep in mind that the market here is ahead of the other emerging markets, and as networks become more complicated and cost pressure starts to build the demand for services is being driven even further,” emphasis Byers.Another area that Nortel is seeing increasing traction from is green technology, a topic that is on the minds of enterprises and IT professionals throughout the world.

“We are seeing growing adoption of green technology in this region. It is predominantly based on two drivers. One is the cost of energy. We are seeing a lot of sensitivity to energy consumption in specific countries like Jordan and Egypt. The second is that government driven initiatives, particularly in the UAE, are mandating green,” says Apollinaire Moreno-Borondo, regional sales engineering leader at Nortel.

“The rate of adoption is proving constant across the entire region with the UAE leading it thanks to government initiatives. I think further adoption will be driven by local governments who have an interest in reducing their energy bills and international enterprises that mandate a green mindset in their organisations,” he continues.

Moreno-Borendo points out that the most critical criteria is the fact that going green makes financial sense. For an IT professional to get the buy in from management when he is looking to purchase green technologies he needs to provide a return on investment.

“There are several ways of measuring return on investment. One way is to measure it with something we have developed called the efficiency calculator. It’s an online resource which enables you to calculate the savings that you are going to make by investing in Nortel products. It allows you to design a network or communications system online and it tells you how much energy you will consume and what that will cost you,” explains Moreno-Borendo.

Although Nortel has seen adoption taking place at an increased pace Moreno -Borendo maintains that challenges to real change still remain in place. The cost of bandwidth is one such obstacle.

“If you want to install tele-presence for instance, which would reduce travel and its related costs then you need lots of bandwidth. That’s near impossible here due to the expense. There also remains a reluctance among users when it comes to changing their habits. This will be remedied through more drivers to force them to change,” says Moreno-Borendo.

He maintains that a crucial factor is the example set by the government and leadership. “What is important in the Middle East is the example set by the ruler. The example set by the ruler has an immediate effect on the behaviour of the citizens. We are seeing entities taking green very seriously as a result of the interest shown by the government leadership,” explains Moreno-Borendo.