5/20/2008 -- Cisco Systems Inc. this week touted the results of a study which it says conclusively verifies that businesses are hip to managed services, especially in the lucrative metro Etherent, IP VPN, IP voice and security segments.

First, a caveat: Cisco itself commissioned the study, which was performed by consultancy Ovum. And (another caveat) Cisco said it commissioned the study "as part of its on-going [sic] commitment to enabling service providers."

According to the Ovum report, the market for IP managed services is expected to grow at a compound annual growth rate of nearly 20 percent over 2012, when it should amount to $66 billion. The Ovum study collected responses from more than 1,300 people in companies that use managed services across all geographical regions, Ovum officials said.

"CIOs and IT directors are increasingly looking to service providers and managed service specialists for deployment and management of their networks to reduce costs and improve efficiency," said Ovum research director Peter Hall in a prepared release. "This results in significant opportunities for those able to meet those needs, especially in the areas of managed voice and security."

Right now, Europe is the managed services leader, although Ovum expects that to change, with North America surpassing the EU to become the largest overall market by 2012. For the duration of the forecast period, IP VPNs will continue to be the most widely deployed managed services, although managed IP voice should notch the fastest overall growth rate (39 percent) over the forecast period.

Good news for Cisco: Almost 40 percent of respondents said they'd use "Cisco Powered" services if they had the option to do so. (Cisco created its "Cisco Powered" program to designate service providers who use its technology and which provide "market-based" standards of support.) On the other hand, a total of 8 percent of respondents said they'd opt for services from the four other highly ranked networking vendors. Cisco spins the result as a validation of both its Powered by Cisco and its managed network services strategies.

"As IT and networks become ever more critical to business success, customers recognize the importance of uptime, security and performance in supporting critical applications," said Al Safarikas, senior director of marketing at Cisco, in a statement. "The worldwide growth in managed services indicated by this study shows that businesses are recognizing that these can be successfully delivered by a managed service provider." --Stephen Swoyer