Top Global Telecom Networking Equipment Vendors Focus on Opex and Services
Budgets in Order to Increase Profits, IDC Says
FRAMINGHAM, Mass. -- January 22, 2013
Global economic instability, intense competitive pressures, and decreased
spending by communications service providers (CSPs) are all forcing networking
equipment vendors to streamline and refocus their business strategies in order
to maintain profits. According to new vendor profiles from International Data
Corporation (IDC), eight of the top global networking equipment vendors --
collectively generating an estimated $124 billion in 2012 revenue, or
approximately 90% of total worldwide network infrastructure revenue -- are
placing significant emphasis on professional services and software product
enhancements that can enable them to access CSP opex budgets in addition to
capital budgets. Vendors profiled include Alcatel-Lucent, Ciena, Cisco,
Ericsson, Huawei, Juniper, NSN, and ZTE.
Pressure is mounting on CSPs to reduce their capex spend in 2013 to be
slightly lower than 2012, and IDC expects this to impact many of the leading
telecom equipment vendors. Additionally, as CSPs shift their focus to reducing
their opex, improving time to service, and offering more innovative mobile
broadband and cloud-based virtualization services with higher margins,
equipment vendors must become more flexible and agile in order to evolve
within this changing landscape.
"As network equipment continues to commoditize, the vendors look to sell
software-based product offerings and value-added services in addition to
network equipment as a way to drive margin expansion," said Nav Chander,
Research Manager, Enterprise Communication Services. "Those vendors that focus
on virtualized product strategies; embrace open, software-based architectures
incorporating SDN concepts; and create value by driving CSP opex lower will
have the greatest impact in the telecom market."
Additional findings from IDC's research include the following:
*Ericsson and Huawei continue to be the overall global telecom product
revenue leaders from 2010 through the first half of 2012 with Huawei
poised to be the 2013 market leader
*Cisco, Juniper, and Ciena have over 50% of their telecom revenue from the
North American region
*The smaller vendors such as Juniper and Ciena have invested a
significantly higher percentage of overall revenue into R&D
The IDC report, Fixed and Mobile Network Infrastructure Vendor Strategies and
Market Positioning (IDC #238666), analyzes the global telecom network
equipment market. It provides a detailed analysis of each of the eight leading
telecom equipment vendor's wireline, wireless, and OSS product strategies.
Data on worldwide carrier revenue by vendor, vendor market share by region,
and R&D expenditures is provided. In addition to discussing key telecom market
trends, it provides a global overview of the equipment market split by the
four major geographic regions: North America, Europe, Middle East and Africa
(EMEA), Asia/Pacific (APAC), and Latin America.
To purchase this study, please contact IDC Sales at 508-988-7988 or
International Data Corporation (IDC) is the premier global provider of market
intelligence, advisory services, and events for the information technology,
telecommunications, and consumer technology markets. IDC helps IT
professionals, business executives, and the investment community to make
fact-based decisions on technology purchases and business strategy. More than
1,000 IDC analysts provide global, regional, and local expertise on technology
and industry opportunities and trends in over 110 countries. For more than 48
years, IDC has provided strategic insights to help our clients achieve their
key business objectives. IDC is a subsidiary of IDG, the world's leading
technology media, research, and events company. You can learn more about IDC
by visiting www.idc.com.
All product and company names may be trademarks or registered trademarks of
their respective holders.
Nav Chander, 508-988-7944
Michael Shirer, 508-935-4200
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