$66 bn market beckons IP-based managed services

$66 bn market beckons IP-based managed services

OVum study confirms growth in Demand for Managed Metro Ethernet, Virtual Private Network, Voice and Security Services

Tuesday, May 20, 2008

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SAN JOSE, USA: Study, performed by Ovum and commissioned by Cisco has confirmed that businesses are increasingly looking to managed service providers for managed metro Ethernet, managed Internet Protocol (IP) Virtual Private Networks (VPNs), managed IP voice and managed security.

The report notes that the market for these managed IP-based services continues to see strong growth at a current compound annual growth rate (CAGR) of 18 percent over the forecast period and is expected to deliver revenues of US $66 billion by 2012.

This comprehensive study was based on data collected from more than 1,300 individuals in companies using managed services in 14 countries across the Americas, Europe, Middle East, Africa and Asia. The companies are in the finance, manufacturing, retail, government, healthcare and education markets.

"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 Peter Hall, Ovum's research director. "This results in significant opportunities for those able to meet those needs, especially in the areas of managed voice and security."

Other key findings and conclusions from Ovum's study include the following:

    Europe currently leads in the adoption of managed services, but will be overtaken by the North American market, which is expected grow to be the     largest market in the world for managed services by 2012. Asia Pacific is projected to have the most rapid growth fueled by managed service adoption. in India and China, with a CAGR estimated at 27 percent.

    Customers who have adopted managed services are largely pleased with that decision, and they are enjoying lower costs and higher levels of support and availability than anticipated.

    The current global market for managed IP VPN services is the largest among the managed services studied at US $17 billion.

    By 2012, managed IP VPNs will remain the most widely deployed adopted     service, though IP voice is the fastest-growing managed service with a 39 percent CAGR for the forecast period.

    The manufacturing industry remains the vertical industry that uses the most managed services, followed by finance and retail. Government fell from third to fourth place in managed services adoption since the first report was published in February 2006.

    Thirty-nine percent of the respondents said they would use "Cisco Powered" services if offered by their providers, in comparison to a total     of 8 percent who said they would use services based on solutions from the next four most highly ranked networking vendors in the study.

Interest from end users in managed service bundles continues to grow, with more than 64 percent of respondents indicating that better, more intelligent, integrated managed service solutions would further incline
them to purchase bundles.
©CIOL Bureau

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