Technology | Media | Telecommunications

Wednesday, April 30, 2008

Traditional Wide-Area Data has Flat Growth

In 2008, U.S. Wide Area Network (WAN) wireline data services are projected to see an overall increase of 2 percent from 2007, with the enterprise segment generating 59 percent of revenues, according to the latest market study by In-Stat.

Looking forward, moderate growth is also projected to continue through 2012. During this period, this market will go through a significant transition as U.S. organizations move from legacy services (frame relay, private line and ATM) to Next Generation Network (NGN) services (IP/MPLS and Ethernet services).

NGN services represent the growth area -- although progressing slowly -- in WAN wireline data services for businesses. These services are increasingly utilized by organizations in building their corporate networking infrastructure.

Combined, these services provide the building blocks necessary in addressing the progressively more demanding connectivity requirements faced by today's businesses. These include:

Support for convergence of voice/data/video; adaptive routing capabilities; extensive reach; traffic engineering with QoS; high capacity/availability; cost effective any-to-any connectivity; wide range of access methods; and the ability to more easily integrate with business processes.

I believe that it's that last issue, the task of alignment between ICT investment and business objectives, where these integration activities seems to stall in most organizations. That said, those CIOs and IT managers who can master this process will reap the benefits.

Currently, legacy services generate almost twice the revenue of NGN services. But looking forward, In-Stat anticipates this to dramatically change over the next 5 years, projecting that by 2012, the revenue allocation for these services will essentially reverse. This transition will vary by size of business segment, with enterprise businesses leading the transition.