Services for Network Ecosystem

Report overview

How Services Are Transforming the Network Ecosystem
Global Market Analysis and Forecast 2008-2013
By Pyramid Research , September 2008

The global market for professional and managed network services, which comprise network consulting, implementation, managed network services and network product support services, is expected to remain robust.

Based on a thorough analysis of the first calendar half of 2008 and projecting expenditures for the second half, Pyramid Research expects total expenditures in 2008 to reach $357.2bn, representing a year-over-year growth rate of 10.7%. Of this worldwide total, $237.7bn will be spent externally by service providers and enterprises with leading professional and managed network services vendors.

This growth continues to be driven by the needs of global enterprise organizations as well as of mobile and fixed-line telecommunications service providers to develop more relevant strategies for, in a broad sense, using deployed network assets more effectively, and, more specifically, for optimizing network performance and capacity. While many enterprises and service providers still use internal network engineering staff and administrators for network projects, an increasing number of these organizations are seeking the independent guidance of third-party professional services and network support organizations that possess the scale and skills to deliver discrete (i.e., one-off) or end-to-end services with global capability.

Key conclusions of the report include the following:

• The focus for the network services provider should extend beyond mere costs. Along with rigorous assessment of cost structures and technology alignment, network technology vendors, NSPs and particularly management consulting firms would do well to articulate for their enterprise or service provider clients a long-term vision that centers on what today’s organization looks like, how it may evolve over the next decade and which path would be most advantageous to pursue.
• Network equipment vendors with services organizations as well as independent consulting firms should possess the skills, knowledge transfer capabilities and global resources to assist client organizations in migrating to an IP network platform as one method of establishing the foundation for all successful technology rationalization- and convergence-led engagements.
• Successful NSPs will possess a deep understanding of emerging technology delivery models such as SaaS and cloud computing that enable always-on, real-time 24/7 application availability, and they should recognize the potential impact on network capacity, network latency and network security.
• For service providers the initial attractiveness associated with simply buying millions of new subscribers remains compelling. Despite often dysfunctional merger execution and currently adverse credit market conditions, M&A activity will likely continue through the 2008-2013 forecast period. As a result, ongoing M&A activity makes post-merger integration a key consulting capability for any services organization trying to compete in the global network services marketplace.
• Organizations and individuals around the world continue to embrace the concept of a seamless communications environment, one that enables access to converged applications — voice, video and data, for instance — anytime, anyplace, over any network and from any device. While this concept is not without numerous technological hurdles, Pyramid Research believes it is incumbent upon professional and managed network services providers as well as other ecosystem participants to make such an ambitious environment a reality.