Experts note that the service offerings are converging with traditional telecoms carriers pitching into markets dominated by IT service providers and outsourcing firms. The points of differentiation between the two camps reducing and this translates into greater choice for enterprises as services become more mature and pricing will come down.

This is not a bad thing for enterprises as competition in the managed service space will keep cost performance high, he added.

Some argue that only one consideration applies when trying to decide between a managed service provider with telco roots, and one with IT house roots.

If it is external connectivity with partners and suppliers and regional/global coverage, then the expertise of a regional or global telco will likely offer better value. While companies looking for internal integration and platform rationalization may find providers with stronger systems integration expertise will usually provide more comprehensive responses to enterprise needs.

According to IDC's inaugural Asia/Pacific Managed Services Study, the Managed Services market in 2004 topped $13.26 billion and US$208 million for the enterprise and telecom carrier markets respectively. In Q1 2005, this was US$3.4 billion and US$63 million respectively. IDC forecasts that the combined market will exhibit growth of 8.8 percent to reach US$14.6 billion in 2005. However, Value Added Managed Services (VAMS)( are expected to grow almost 15 percent in 2005 and it is this segment that has caught the attention of Managed Services providers, opening up new opportunities for them.