Market research firm Infonetics Research has generated a new report that focuses on service providers outsourcing to other vendors in the business. The report, titled Service Provider Outsourcing to Vendors, provides market size and vendor market share, and projects growth for the next five years.
Some of the results of this report indicate that service providers spent 9 percent more on outsourced networking services to equipment vendors in 2011, which amounted to $60 billion, than in 2010’s $55 billion.
At this rate, the Infonetics (News - Alert) study shows that the service provider outsourcing market is expected to reach $75 billion per year by 2016.
The study shows that wireless is the fastest growing segment. IBM (News - Alert) took a slight lead over Hewlett-Packard in the intensely competitive service provider outsourcing market in 2011, followed by Ericsson and Nokia Siemens Networks. Huawei (News - Alert) continued its ascent, edging closer to the leaders.
Infonetics’ report shows that nearly one-third of the world’s wireline and wireless subscriber base is now being managed by traditional equipment vendors. And major growth areas of carrier outsourcing continues to be network maintenance, planning, design and operations.
Also, according to Infonetics’s report, Europe, Middle East and Africa (EMEA) is the largest market for outsourced services, but China and India are propelling Asia Pacific.
“Service providers continue to spend more on outsourcing, making it clear that equipment vendors must push ahead with their transformation from box producers to managed service providers,” said Stéphane Téral, Infonetics Research’s (News - Alert) principal analyst for mobile infrastructure and carrier economics. “Opex reduction, though taboo, remains the chief driver for the outsourcing and managed services market, as telcos farm out more and more tasks to cut operational expenses and beef up margins.”
According to Infonetics, the report Service Provider Outsourcing to Vendors tracks the revenue vendors derive from the services they offer to their service provider clients, which include mobile and fixed network planning and design, building, maintenance, operations, application service delivery, service provisioning and activation, and billing.
The report also provides market shares for Alcatel-Lucent, Ciena, Cisco, Ericsson, Fujitsu, Hitachi, HP, Huawei, IBM, Juniper Networks, Microsoft, Motorola, NEC (News - Alert), Nokia Siemens Networks, Nortel, Tellabs, UTStarcom and ZTE.
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Edited by Braden Becker