|
Friday, February 2, 2007
Shipra Arora
The decrease in broadband costs has helped in fueling the demand for cost-effective communication solutions based on broadband. With the enterprises today demanding value added offerings on top of pure bandwidth play, the enterprise broadband market has shifted from pure bandwidth play to services and solutions. Today, all major service providers are already offering applications such as MPLS, IP VPN, IP Telephony, IP conferencing, security, managed services, ASP services, bandwidth on demand, co-location, hosting services, etc. Thereby, providing the vendors and service providers a whole new avenue for incremental revenues. As vendors gear up with newer service offerings, it's the right time for enterprises to eye enhanced broadband applications.
Over the next 1-2 years, as the market becomes more competitive, CIOs will have a much broader range of offerings to choose from and at cost effective price points. However, last mile delivery of services is a concern area that is being taken care of, but still exists to some extent. In addition to this, the packaging of services, consistency in quality, adherence to SLAs and price points are going to be some of the key determinants shaping up the enterprise broadband solutions market in the coming year.
ABUNDANT APPLICATIONS
A significant driver in the growth of broadband solutions and services is the growing demand for bandwidth intensive applications including inter-office and converged solutions. The services vertical is emerging as the biggest market of broadband applications, followed by manufacturing and FMCG.
According to Atul Bindal, joint president, Broadband & Telephone Services, Bharti Airtel, the rise in bandwidth and connectivity requirements is today being generated by an increasing number of organizations adopting Enterprise-wide Applications, WAN or inventory management besides using bandwidth for e-mail, Internet access and inter-office communication. "In the coming days we will see an increase in the convergence of voice, data and video services with a rapid growth in network traffic," he adds. Overall, triple play is emerging as a big catalyst in the growth of enterprise broadband applications.
The availability of enhanced and a wider range of broadband solutions in the market is further catalyzing the growth of broadband applications in the enterprise. Hence, the growth in each is driving and pushing the other.
| Fact Sheet |
|
Current growth trends indicate that the market is all set for a healthy, long innings. To get a feel of the growth in enterprise broadband solutions and services market, let's take a look at how the data services and managed services markets have fared and their future growth potential.
As per Frost & Sullivan, the overall data services market for enterprises in India aggregated Rs 2,560 crore in FY 2005-06 and is estimated to touch Rs 8,020 crore in 2009-10. Compounding an annual growth rate of 33% from 2005-2006 to 2009-10. Among the high growth segments in the data services market are national leased line, IP VPN, IPLC and MPLS. MPLS is expected to grow fastest among various data services technologies.
The enterprise market for MPLS in India in 2005-06 stood at Rs 48 crore and is expected to reach Rs 217 crore in FY 2009-2010, a CAGR of over 45.5%. The IPLC service market for large enterprises stood at $615 crore for FY 2005-06 and is expected to grow to Rs 2,051 crore in FY 2009-10, a CAGR of approximately 35%. The national leased line market aggregated Rs 680 crore in revenues in 2005-06 and is estimated to touch Rs 2,503 in 2009-10, at a CAGR of 38.5%. On the other hand, the enterprise market for IP VPN in FY 2005-06 was worth Rs 300 crore and is expected to reach Rs 1,069 crore in 2009-2010. Thereby, aggregating a CAGR of around 37.4% during the period.
In terms of the managed services market, the segment aggregated a total market size of Rs 701 crore in FY 2005-2006 and is estimated to reach Rs 1,548 crore in 2009-10, growing at a CAGR of 22%, as per Frost & Sullivan. Data centre, BCRS and co-location are three of the fastest growing managed services in the Indian market, growing at a CAGR of 24.4%, 24.5% and 20.4%, respectively, during the time period between FY 2005-06 and 2009-10. The data center market is slotted to grow from Rs 240 crore in 2005-06 to Rs 575 crore in 2009-10, the BCRS market from Rs 185 crore in 2005-06 to Rs 445 crore in 2009-10, and the co-location services market from Rs 109 crore in 2005-06 to Rs 228 crore in 2009-10. The need for uninterrupted business functioning, especially in the BFSI, IT/ITeS and government verticals is leading to a high growth of BCRS in the managed services space.
|
There are a host of next level of broadband applications in enterprises that are now emerging on the scene in addition to those that are already in the process of becoming mainstream. According to PK Saji, VP, Technology, Sify, voice and video are the most used high-bandwidth broadband applications which are real-time in nature. Bandwidth requirements are growing mostly because of such applications. Some top of the list enterprise broadband applications include video conferencing, video calling, netmeeting, VoIP, virtual classroom and e-learning applications for corporate training, access to content and knowledge base on demand in the corporate, etc.
Going forward, the enterprises are expected to deploy more IP based bandwidth intensive applications like Unified Communications and TelePresence. According to Shrikant Shitole, business development manager, Service Provider, Cisco Systems-India & SAARC, over the last few years, enterprises have been deploying IP based applications to drive greater productivity and profitability. As a first step, they were increasingly using IP based applications such as IP VPN and IP Telephony.
According to Bindal, in the coming days, VoIP and video conferencing applications will emerge as the key applications driving enterprise level broadband. "Enterprises today are moving towards communication technologies like VoIP, videoconferencing and webconferencing, instant messaging, thereby saving costs involved in travel and enhancing productivity," he adds. With the growth in conferencing and collaboration kind of requirements, there will be a further spurt in the demand for the video- and webconferencing kind of applications.
Apart from these applications, the basic enterprise applications are also a significant growth engine for broadband solutions. According to Sourabh Kaushal, industry manager, ICT Practice, Frost & Sullivan, India, enterprises are moving beyond ERP application and implementing to a host of other applications like CRM, business intelligence, SCM, Inventory management, intranets, etc which will need access, thereby warranting the need for high bandwidth. Besides, organizations are increasingly moving to a centralized architecture with the various offices connecting to applications residing in a central database. This, again, is warranting the need for high bandwidth for connecting.
Enterprise customers have also moved into extranet VPN solutions connecting sales partners and agents into their VPN. Some more enterprise applications requiring higher bandwidth, span across the spectrum ranging from sales force productivity tools, order capture and status, live stock updates and customer service. Organizations have adopted these in varying degrees based on their focus and impact.
|
