Telecom Vendors Split Between Markets

The line between enterprise and service provider requirements is becoming blurred as financial pressure forces the two sides together

February 12, 2003

2 Min Read

CEDAR KNOLLS, N.J. -- Cisco recently announced its dual objectives of increasing its share of telco capital spending and achieving a 50:50 split between service provider and enterprise revenues. According to a recent report by Probe Research, the prospect is a realistic one, despite the current slowdown in telecom capital expenditure. However, Probe research director Richard Endersby believes that the demarcations between enterprise and service provider requirements are becoming increasingly artificial, and that financial pressure on the players will force the two sides together. "Telecom vendors are faced with the problem of supporting an increasing variety of platforms with different operating systems, chipsets and the like aimed at two sets of markets," Endersby explains. As a leading supplier of equipment, Cisco's position is a good guide to the overall health of the industry. "Currently, the thinking at many service providers, enterprises, vendors and investors is that the public and private networks are separate entities with differing requirements," he says. "That has probably been true in the past, but we believe that the distinctions are becoming unclear." Endersby cites the following reasons for the blurring of these markets:

  • Enterprises are demanding five nines reliability from their internal network, MPLS for traffic engineering and other purposes, security, and monitoring equivalent to telco standards.

  • Service providers are looking for price breakpoints that are at the same level as enterprises' with similar terms for software updates and support.

  • Enterprises are now beginning to build their own networks where their traditional public network suppliers either do not have a presence or are unwilling or unable to provide a key service required by service providers.

Probe's report "Cisco Systems - Market Position and Revenue Growth Strategies," the latest in the Global Internet Infrastructure Markets series, fully examines the company's dual-target strategy. It assesses Cisco's current market position and opportunities in its stated growth areas. New markets are analyzed in detail as are existing markets, including RAS/RAC, DSLAM, CMTS, core router, edge router, edge switching, core switch and Ethernet switching. Probe Research Inc.

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