The telco market will be a target-rich-environment for integrators, according to a recent survey conducted by monolithic integration and consulting company Cap Gemini Ernst & Young (CGE&Y).
The report, titled The Leadership Connection: A Dialogue on the Global Connected Society, surveyed 127 companies from the communications, entertainment and technology industries to provide the integrator with a preview of what it believes will happen over the next five years.
And the future looks bright according to John Edwards, CEO of CGE&Y's Telecom, Media & Networks Global business unit, for network integrators to sell into what will become a boon industry in the Asia Pacific region -- telecommunications.
According to Edwards, the underlying message for networkers is to move into services to augment their traditional integration business. But the results of the survey weren't all promising, claims Edwards, who believes telcos may compete directly with integrators at this level in order to tap into rich market segments.
"A lot of telcos have large internal consulting divisions which are going to get into this space. If this happens, will find we're competing against these companies directly," Edwards believes.
The survey broke network integration into four categories of services. The first was network-based solutions such as providing infrastructure, cabling, switching and general integration. The second category outlined by the survey included the design, management and security of a customer's network, a market which CGE&Y expects to be worth around $US32 billion worldwide by 2004, of which the Asia-Pacific will make up around 16 per cent.
The third sector where Edwards believes telcos will need to partner with channel companies is in application provision and hosting. The ASP market is oversubscribed, with a lot of companies servicing a small number of customers, while the content provision market is demanding more services, says Edwards.
"The ASP market to date has been disappointing. Most telcos are going by the philosophy of 'if you build it, they will come'. But this is not going to happen, at least not yet," claims Edwards. "But we believe the ASP market will take off, just not before the infrastructure is in place."
The promised land for networkers will be in applications outsourcing and development for both the large and small telcos. "These companies will be looking to reduce costs and free up resources to fund [infrastructure rollouts] so outsourcing their entire billing system for example, would be a good idea."
Photograph: CGE&Y CEO John Edwards