Analysis: Telstra takes on SME IT service providers

The telco has already announced its plans to offer Microsoft online services, which will be hosted by Microsoft and delivered by T Suite - the recently announced Software-as-a-Service (SaaS) platform for SMEs.

Claudio Castelli, senior analyst at global advisory and consulting firm Ovum, told CRN, the first products from Telstra’s partnership with Microsoft will be introduced in the market by mid 2009.

“Telstra will be another player in the SaaS market and will compete with other companies. To what extend this competition will happen will depend on a lot of things, including what applications Telstra will add to this model in the future,” he said.

“SaaS is a way of offering applications not the final product and it seems Telstra doesn’t want to restrict its SaaS offerings to MS products only.

According to Castelli the MS offerings will include the services available on the Exchange Online, SharePoint Online, Office Communications Online and Office Live Meeting. These are more related to office collaboration than to specific vertical needs.”

“[This] strategic alliance with Microsoft for convergent services will help to build a set of services that benefit from network integration and exploit the high speed and availability of its Next G and Next IP networks. The intention is to grow revenues on ICT and managed services,” said Castelli.

“The alliance is part of the telco’s transformation process to deliver convergent services to enterprises.

“Telstra’s five-year all-IP transformation strategy initiated in 2005 is taking place at all layers of the network. It started from the core - transport and access - and is now going through to applications and services.”

Castelli claimed the intention is to provide end-to-end ICT services to enterprises, creating longer term customer relationships and avoiding the risk of commoditisation.

In addition, if managed and hosted services have been already growing across enterprises, now with the conditions in the financial market, it is expected to get even more traction, he said.

“Hosted services bring the flexibility companies need to respond to the market pressures, allowing enterprises to pay as they grow or reduce their operations when business gets tougher,” he said.

Most of the online services require high network availability and coverage across fixed and mobile networks and Telstra provides that.

“In addition, the SaaS model is more attractive to SMEs and Telstra has a huge base of SME customers,” said Castelli.

“There is a growing trend toward hosted and managed services. SaaS is an interesting hosted approach for SMEs but we can’t generalise and say it will be the only way.”

In general larger companies require a higher level of integration and customisation not available in the SaaS offerings.

Castelli said the alliance also intends to offer enterprise mobility applications based on the Windows Mobile platform.

“The Systems Centre Mobile Device Manager (SCMDM) will allow IT managers to control their mobile fleet in a similar way as they do for desktops, which can reduce the management complexity,” claimed Castelli.

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