Digital Lifescapes

While most telecom service providers across the globe continue to invest in software-defined networking and open source software, a few are now investing in the new wave of technologies. In particular, technology leadership is a key component in China's strategic plan to stimulate new economic growth. In its latest benchmarking study to identify the leaders and laggards in telecom service provider innovation, ABI Research has concluded that Asian telcos are the recognized technology trailblazers, followed by U.S. tier-one service providers, AT&T and Verizon. 5G Wireless Market Development However, European telcos are perceived as laggards in the realm of telco innovation, with DT, Orange, Telefonica and Vodafone distant followers of China Mobile, NTT Docomo, Softbank and KDDI -- which are collectively ramping up their efforts to foster technology-empowered innovation. ABI Research has assessed patent portfolios, standards contributions, open source involvement, acquisit...

Telecom service providers in the Asia-Pacific region are actively virtualizing their network architecture. A flurry of new applications development is driven by open source communities -- such as OPNFV and ONAP -- as well as from individual efforts by telcos. According to the latest market study by ABI Research, the network function virtualization (NFV) market in the Asia-Pacific region will grow to $9.24 billion in 2022. NFV Market Development in Asia-Pacific Japan is the largest single market within the Asia-Pacific region, constituting 25.7 percent of the total NFV revenue. This is followed by South Korea and China, at 22.7 percent and 14.6 percent of the revenue growth respectively. "Japan leads in the region, not only because of the desire to design resilient and reliable networks in preparation for future disaster threats, but also to prepare for the 2020 Summer Olympics," said Lian Jye Su, senior analyst at ABI Research . South Korea and China are actively pr...

Cloud computing services supported by converged networks will create new opportunities for forward-looking senior executives to make informed decisions and gain significant new strategic competitive advantages. According to the latest market study by Frost & Sullivan, transaction data is the new currency for the digital enterprise and high-speed, dedicated and secure network connections are crucial for senior decision makers to monetize their commercial data residing in cloud services. Furthermore, an integrated network with cloud services will ensure a secured network to deliver business-critical applications and data to support executives in achieving their digital transformation agenda and related business outcomes. Converged Infrastructure Market Development Industry verticals, both traditional and emerging, are already investing heavily in integrated networks as part of their cloud-first journey to leverage next-generation technologies -- such as big data, analytics, a...

Open source hardware and software projects continue to gain momentum in the global telecom sector. However, after a relatively slow start, the Network Function Virtualization (NFV) market will experience growth through ongoing technology investments by major telecommunication service providers. According to the latest worldwide market study by ABI Research, North America will lead global growth, accumulating $13 billion in NFV-related investments during 2022. Meanwhile, Europe will experience the highest growth rate, at an estimated 53 percent CAGR between 2017 and 2022. NFV Technology Market Development Early adopters of the technology claim several benefits to NFV-enabled systems -- which include reductions in network CAPEX and OPEX, service agility, and reduced deployment times for new network elements. "In 2015 and 2016, the market experienced some early successes but mostly reconsideration and failure with NFV," says Neha Pachade, senior analyst at ABI Research ....

The worldwide Optical networking infrastructure market is predicted to grow from $13.6 billion in 2016 to $17.3 billion by 2021, according to the latest market study by ACG Research. Moreover, purchases of Optical Data Center Interconnect (DCI) equipment are expected to grow from $1.69 billion in 2016 to $4.3 billion in 2021. And, there's growth in all geographic regions. In 2016, Metro optical increased 5.5 percent and Long-Haul delivered 10.5 percent growth. Asia-Pacific remains the largest optical networking region, with 10 percent growth in spending in 2016. Driven in part by Verizon network upgrades, the North American Metro Optical market will return to growth in 2017 after a slow 2016. Optical Networking Market Development ACG Research analysts anticipate worldwide Metro Optical spending to increase 9.4 percent in 2017. When combined with the 19.1 percent decline in legacy Optical infrastructure spending in 2016, total Optical infrastructure managed a modest 2.7 perce...

Enterprise networking vendors and telecommunication service providers encountered a series of challenges in 2016, as more customers shifted their focus from managing business technology investment to the strategic procurement of products and services related to digital transformation projects. That's why investments in fiber networks, 5G wireless, NFV and SDN will be critical for telecom service providers to keep pace with market demand over the next five years, as more CIOs integrate next-generation technologies into their IT environments, according to the latest market study by Technology Business Research (TBR). Enterprise IT Market Development IT services remained the largest enterprise segment in 3Q16, with combined revenue among benchmark companies rising 9 percent year-to-year to reach $11.7 billion due to growth in demand for Internet of Things (IoT), cloud computing and IT security. Furthermore, the divestment of Verizon and CenturyLink data centers illustrate that...

The legacy enterprise networking environment within enterprise data centers continues to transition away from proprietary platforms to more open standards-based solutions. Traditional hardware vendors will gradually embrace the trend, as their customers seek to lower networking costs and improve performance. Software-defined networking (SDN) is approaching adoption by an early majority of enterprises and will compose nearly 40 percent of global enterprise network infrastructure revenue -- that's about $12.7 billion by 2020 -- according to the latest market study by Technology Business Research (TBR). Vendor revenue displacement will be incremental during this time, as SDN solutions largely coexist with legacy networking technologies. However, the ongoing virtualization of network functions is already starting to disrupt the incumbent status-quo. SDN Market Development Opportunities "Today’s business environment is characterized by globally distributed pools of informat...

Telecom service providers are embracing open source software and are moving beyond trial deployments. Moreover, they're seeking ways to free themselves from the technology constraints and associated costs of maintaining legacy networking equipment. Three-quarters of carriers participating in a survey of software-defined networking (SDN) technology demand say they've already deployed, or will deploy, in 2016 -- plus, 100 percent say they plan to deploy at some point in the future. Ongoing SDN Market Development The top drivers for service provider SDN investments are simplification and automation of network and service provisioning. Meanwhile, most operators are moving from initial SDN proof-of-concept evaluations to their first commercial deployments in 2016 and 2017. According to findings from the latest survey of carrier SDN strategies by IHS Markit , it’s clear that service providers around the globe are investing in SDN as part of a larger move to transform their in...

Traditional telecom networking equipment vendors have been preparing for the ongoing transition from hardware-centric business models of the past to a more software-oriented model. Meanwhile, the leading telecom service providers continue to adopt low-cost commodity hardware and open source software. According to the latest worldwide market study by IHS Markit , 100 percent of the telecom service providers participating in their recent survey say they will deploy Network Functions Virtualization (NFV) at some point, with 81 percent expecting to do so by 2017. Moreover, 59 percent of telecom network operator respondents have already deployed or will deploy NFV this year. However, integrating NFV into existing networks is an issue for a majority of survey respondents, as is the perceived lack of carrier-grade products. Regardless of these concerns, telecom service providers around the globe are rapidly moving toward NFV, which the latest study by IHS Markit bears out. NFV and SDN M...

The traditional carrier networking equipment sector has been awaiting a major transition, as telecom service providers sought a way to free themselves from the constraints of proprietary platforms. Open source software-defined networking (SDN) and network functions virtualization (NFV) hold the key to progress. According to the latest worldwide study by Technology Business Research (TBR), the NFV and SDN market will grow at a 116 percent CAGR from 2015 through 2021 to reach nearly $158 billion. Early adopters, such as AT&T, began to ramp up their investment in 2015 as open digital transformation became a top strategic priority. "A growing group of Tier 1 operators is leading the charge in implementing NFV and SDN. This group is driving a significant amount of development in the NFV and SDN ecosystem and is pushing the vendor community to rapidly adapt to this new architectural approach to networks," said Chris Antlitz, senior analyst at TBR . SDN and NFV Application...

Enterprise networking is experiencing a significant transformation, similar to the telecom service provider sector. The data center and enterprise software‑defined networking (SDN) market increased by 82 percent in 2015 from the prior year -- reaching $1.4 billion, according to the latest worldwide market study by IHS. New SDN use cases continue to emerge, with 2015 including the establishment of the SD-WAN market. Many new startups vendors, WAN optimization appliance vendors and some enterprise networking vendors have entered the market, now IHS has forecast SD-WAN revenue to reach $1.3 billion by 2020. Growth for SDN-capable Ethernet switches and SDN controllers continues to grow, with early players, pure-play SDN startups and traditional switch vendors gaining traction as customer deployments escalate. Enterprise SDN Market Development Trends Regionally, North America, Europe, the Middle East and Africa (EMEA), Asia-Pacific and the Caribbean and Latin America (CALA) were all...

The Telecom Infrastructure Services (TIS) market in North America will decline from $30.4 billion in 2015 to $27.4 billion in 2021 at a CAGR of -1.7 percent, according to the latest market study by Technology Business Research (TBR). Telecom network operators will shift their focus to software-mediated networks, specifically orchestration, automation, SDN and NFV. Fifth generation (5G) networks will begin to be deployed commercially in 2020, but ongoing rollouts will be use case-driven rather than a nationwide build-out like what occurred in previous generations of wireless technologies, providing little relief to the market. Software-Defined Networking Momentum Decommissioning of legacy infrastructure -- and the  implementation of NFV and SDN -- will accelerate the decline in the maintenance market. Telecom network operators are decommissioning legacy infrastructure, with Tier 1 service providers leading the charge to an all-IP environment. "The deployment and maintenance...

There once was a time when traditional telecom service provider networking vendors were gratified that their proprietary platforms ensured continued success. As long as carrier customers agreed to buy products that locked them into the market leader's technology and associated ecosystems, they were assured high-profit margins and limited competition. In fact, not that long ago, some industry analysts actually believed that Cisco could maintain 50%+ market share in several of their product categories, for an unlimited period of time. After all, they had already achieved that goal -- in some cases, for more than two decades. The market outlook seemed to be predictable, until one day it wasn't. Why Telecom Networking is Primed for Disruption For the past several years, the telecom industry has been moving toward a major network and operational transformation epitomized by software-defined networking (SDN) and network functions virtualization (NFV) with the top goals of autom...

Technology Business Research (TBR) forecasts revenue of $12 billion in 2020 for the global enterprise software-defined networking (SDN) market, that's a CAGR of 70.2 percent from 2015 to 2020. Moreover, it's going to become a substantial portion of the overall enterprise networking infrastructure market, as it displaces legacy technologies. Large enterprise organizations are in the early stages of SDN trials to reduce network bottlenecks. As the technological and business value of the SDN architecture is established, ongoing user adoption will expand over time. Notably, vendors will need to help their customers evolve their internal organization silos to support digital business transformation projects and enable SDN to flourish. Open Networking Systems Gain Momentum "Adoption is still fairly small and concentrated," said Krista Macomber, senior analyst at TBR . But 2016 will be a telling year as standards bodies, such as the Open Networking Foundation, matu...

Many traditional IT vendors were challenged in 2015. The average revenue and gross profit margin slipped year-to-year as demand for legacy hardware vendor implementations declined, according to the latest worldwide market study by Technology Business Research (TBR). However, the study's benchmarked IT vendors still achieved $23 billion in revenue and avoided more severe declines by adjusting their go-to-market portfolios and selling models to capture emerging technology opportunities. "Industry-standard server (ISS) has a growing impact on the global data center hardware market, composing an increasing share of the data center market and retaining the largest share of total revenue," said Krista Macomber, senior analyst at TBR . TBR analysts estimate that average ISS unit shipments increased by just 1.8 percent year-to-year, indicating the growing impact of hardware commoditization and the reactive low-price strategies used by many vendors. Legacy IT Storage De...

Each new year brings a fresh set of industry and market predictions from the leading analysts. This year, the Internet of Things (IoT) is a hot topic. The Analysys Mason annual Technology, Media and Telecom (TMT) predictions reveal which trends will make an impact in the marketplace during the next 12 months. According to their assessment, telecom network operators and their suppliers must pay close attention to these 10 key trends for their decision-making during 2016 -- note, they are listed in order of significance. Top-Ten TMT Predictions for 2016 The contest for worldwide dominance in low-power, wide-area (LPWA) wireless networking technology will be confined to NarrowBand IoT (NB-IoT) and LoRa wide area networks for IoT. The most important M2M sector in 2016 will be connected cars – the number of connected vehicles will increase to over 150 million, with the largest network operators reaping the benefits. Google will decisively intervene in the communication services mar...

As more multinational companies plan for their digital transformation, most are assessing their communication network capabilities. Meanwhile, the enterprise software-defined networking (SDN) market is maturing, and increasing adoption indicates that it's gaining momentum. SDN early-adopters are completing proof-of-concept trials and shifting to production deployments, which will transition into mainstream market adoption between now and 2020, according to the latest worldwide market study by Technology Business Research (TBR). "SDN will become a substantial contributor to the overall network infrastructure market," said Krista Macomber, data center analyst at TBR . Production deployments have started within large-scale enterprise environments, and will spread as international standards bodies finalize their work and SDN vendors expand into new use cases. According to the TBR assessment, previously a small number of large vendors dominated networking standards, bu...

During 2015, across numerous industries, the quest for a competitive advantage via a Digital Transformation agenda has been a key focal point of strategic planning discussions between concerned CEOs and their executive leadership teams. Making bold moves and implementing big changes requires a huge concerted organizational effort. Besides, it can't be rushed. However, with their legacy business models already showing signs of imminent disruption, the leaders of major telecom service providers have been moved to action. Many have discovered that they're not adequately equipped to address the forward-looking view of their markets. So, they've now embarked on several momentous experiments -- intended to uncover the foundation for future success. According to the latest worldwide market study by Technology Business Research ( TBR ), the telecom service provider sector is entering the early commercial stage for Network Functions Virtualization (NFV) and Software Defined Net...

The traditional enterprise networking market will continue to evolve as more companies deploy new technologies to increase overall efficiency and productivity, drive revenue growth, and secure their essential network infrastructure. The overall enterprise networking market will grow at a 5.9 percent CAGR through 2018, reaching $99 billion in revenue -- due to double-digit CAGRs in the wireless networks and security segments, according to the latest global market study by Technology Business Research (TBR). Fueled by a 7.2 percent CAGR, professional services will become the largest revenue segment by 2018, as vendors such as Cisco evolve their legacy hardware-based business models to facilitate engagement with Line-of-Business buyers through a services-led approach. Traditional hardware segments -- such as IP network infrastructure and unified communications and collaboration -- will grow at low single-digit rates due to the ongoing adoption of cloud computing and software define...

Around the world, many telecom service providers are in a state of transition, as their traditional voice and data communications service growth opportunities are either limited or in a decline. Meanwhile, the need to pursue new revenue opportunities has often been restricted by a historically slow moving organization and underlying infrastructure constraints that essentially made them inflexible to address the need to change. Therefore, during 2015, selective organizational restructuring and fundamental infrastructure transitions will be implemented to enable these telecom service providers to adapt more effectively to the apparent new opportunities in the marketplace. Much of the change will be driven by the deployment of new software, systems and related professional services from vendors with domain experience in managing these business model transitions. Adoption of next-generation technologies by telecom service providers has led to worldwide growth in the Operation Suppo...