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Globalisation and modernisation drive demand for managed network services.

Published: 2013-12-20

The market for managed LAN and WLAN services is driven, on one hand, by the increasing globalisation of businesses and by the modernisation of business communications on the other. Companies located in advanced markets, worldwide, continue to expand their operations internationally and, contemporaneously, are increasingly off-shoring some of their business processes — back office support, customer relations, billing, IT and technical support — by creating own subsidiaries and representative offices abroad.

Large business customers, who manage their own LANs but look for an outsourcing solution, represent the most promising opportunity. Some companies just aim to focus on own core activities and to cut down on maintenance and staff costs. In this scenario, the provider is simply taking over the management of an existing infrastructure. Other companies have heterogeneous infrastructure, integrating equipment from various vendors, and look for solutions to cut the maintenance costs of their complex and costly hardware but also to modernise their networks. In this scenario, the provider takes over the network management but is also providing the infrastructure; and the customer takes the opportunity to upgrade old appliances and replace parts or the entire network.

In addition to these two fundamental drivers, some trends observed recently could represent an additional market opportunity. There is an increasing demand for high-speed switches to accommodate huge data transfers for heavy-bandwidth and high availability enterprise applications and communication services (e.g. rich communication services, videoconferencing, virtualised desktop interfaces and cloud-based disaster recovery solutions). Additionally, there is an increasing demand for data centre ports in light of a parallel trend to virtualise some business applications, hosting geo-redundant data and applications in data centre facilities (e.g. especially companies in banking, insurance, healthcare and airline industries). Al-though the current demand is low, the market for WLAN access points will increase as more and more companies capitalise on the mobility of their employees.

Published: 2013-12-20

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