European Telecom Operator Managed Services Deals Survey: H2 2008

Forrester's sixth survey of managed services deals signed in Europe by telecom service providers reviews 476 contract wins recorded in the second half of 2008. The number of deals increased from the 407 that we tracked in H1 2008; however, the total contract value shrank to €3.3 billion, way down from the €7.7 billion reported in the previous half year. Continuing the trend over the past three years, the majority of the deals are small and short term, with only one megadeal reported by the market leader BT Global Services — down from the three reported in the first half of the year. The percentage of converged deals — those with both a telecom and an IT services component — collapsed from 27% in H2 2007 to 3%. From discussions with service providers, we conclude that today's very strong preference for simple contracts with only one service type is a consequence of the global downturn: Small, single-service, short-term contracts can be negotiated and implemented quickly and help firms achieve their top priorities of rapid cost reduction, flexibility, and agility. Infrastructure and operations (I&O) professionals should follow this trend away from complex and inflexible deals.