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Sizing Up Services

10:00 AM -- As hardware margins head south, all the major equipment vendors are jostling for position in the "services" market -- you know, integration, planning, outsourcing, running networks for carriers, and all that important stuff that doesn't come shrink-wrapped and damaged.

And it's shaping up to be the new vendor battleground.

While the likes of Lucent -- now, of course, Alcatel-Lucent (NYSE: ALU) -- and Nortel Networks Ltd. have been upping their game in this area in the past year or two, Ericsson AB (Nasdaq: ERIC) has been touting its global services business for years, and has 23,000 staff working on the front line with operators. Following its recent revamp, Global Services is one of the Swedish vendor's three new business units. (See Ericsson Revamps, Nortel CEO Serious About Services, and Lucent Pushing Services.)

Now, for the first time, Ericsson reckons it knows just how big that market is, having hired the services of Ernst & Young International . The consultancy wet its metaphorical finger, stuck it out of the window, and came up with $57 billion for 2005, up from $52 billion in 2004 and $47 billion in 2003.

Ericsson says that's due to grow again this year and next. But with the other major vendors, including a combined Nokia Corp. (NYSE: NOK)/Siemens Communications Group , and all the major systems integrators battling for the carriers' dollars, it's going to be even tougher than ever to pick up new business in the services market. (See IBM, EDS Share Vodafone Spoils.)

— Ray Le Maistre, International News Editor, Light Reading

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