Network Infrastructure Services Webinar Deck

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TECHNOLOGY BUSINESS RESEARCH, INC.

TBR’s Network Business QuarterlySM

2011 NIS Benchmark HighlightsTechnology Business Research Webinar Series

Sept. 27, 2012

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2 TBR Webinar Series | 9.27.12 | www.tbri.com | ©2012 Technology Business Research Inc.

For further information, please contact:

Kate Price James McIlroyPractice Manager, Networking & Mobility Vice President of [email protected] [email protected]

Scott DennehySenior [email protected]@scottdTBR

NIS Benchmark Contacts

Your presenter:

mailto:[email protected]



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Introduction

$50 billion and growing …

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Network Infrastructure Services (NIS) Benchmark CoverageService Segments• Maintenance• Managed Services• Professional Serviceso Deploymento Consultingo Systems Integrationo Design & Planningo Network Optimizationo Securityo Training & Certification

Geographic Segments• North America• CALA• EMEA• APAC

Webinar Overview

Suppliers

TBR obtained and analyzed revenue, margin and headcount for 11 suppliers across three main service categories and four geographies

Network Technologies:

Routers and switches, unified communications & collaboration, network security (e.g., firewalls), video/telepresence, IP telephony, WAN optimization/acceleration, storage area networking, optical networking, wireless LAN, converged data center infrastructure, network management/automation software, OS software

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NIS suppliers will focus on enterprise customers’ need to lower costs in mature markets while capitalizing on growth in emerging regions

Market Trends and Drivers

Market Trends & Drivers

Cost reduction remains a key driver of enterprise IT strategy, particularly in developed markets where economic conditions have been slow to recover.

Using Cisco as a model, suppliers are restructuring and investing in their channel partner programs to drive NIS growth and profitability.

With major markets in North America and Europe stagnant, suppliers are focusing on emerging markets for growth.

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NIS are still largely product-driven; most NIS suppliers utilize one of two main strategies

Supplier Overview

Equipment Suppliers IT Services Firms

• Lead with product and attach services

• Revenue mix weighted toward maintenance

• Lead with services and attach product

• Revenue mix weighted toward professional/managed services

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Cisco leads in overall NIS revenue volume by a wide margin, leveraging its dominant market share position in enterprise networking

Total NIS Revenue

Partnerships with best-of-breed equipment suppliers, such as Cisco, are key drivers of NIS revenue for Accenture and IBM

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In NIS, the revenue mix of suppliers is not always an accurate indicator of their margin performance

NIS Operating Margin

In general, NIS suppliers are focusing on margin improvement through service automation and hiring offshore/low-cost labor

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Product-attached maintenance will remain a slow-growing segment; customer appetite for professional and managed services is on the rise

NIS Segment Trends and Drivers

NIS Segment Trends and Drivers

Maintenance services provide a steady and dependable revenue stream for network equipment providers due to their high attach rates.

Professional Services are being driven by customers’ needs to engineer their networks to contend with the challenges presented by virtualization, cloud, mobility, security and big data.

Managed services are becoming increasingly important to enterprise customers, especially for multivendor support.

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Cisco leads in overall revenue volume by a wide margin, primarily driven by maintenance services sold through the channel

For IT services firms, maintenance services are mostly offered as part of an end-to-end solution and are often heavily discounted

Maintenance Services

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Accenture leads in professional services volume due to its consulting-first customer engagement model

Professional Services

Network equipment providers focus predominantly on high-end opportunities to keep margins high and avoid channel conflict

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IBM’s scale and solution breadth position the company as a leader in managed services

Managed Services

Managed services are not a major driver of NIS revenue for network equipment providers due to the significant investment and multivendor capabilities required

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Partnerships are key for suppliers looking to expand their reach outside of their home countries

Geographic Views

North AmericaForeign-based suppliers are investing in their North American capabilities to steal share from U.S. incumbents.

Central & Latin AmericaCALA provides ample opportunities for growth, with Brazil and Mexico leading the way.

Asia PacificAPAC is becoming an intense battleground, with almost all suppliers seeing revenue growth from the region in 2011.

Europe, Middle East and AfricaWith developed markets in Europe still facing turmoil, suppliers are turning their attention to emerging countries to drive growth.

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TBR’s Network Infrastructure Services benchmark delivers the data and insights required to capture more services revenue

Value• TBR’s comprehensive view of the NIS market offers current and

historical insight, enabling suppliers to make informed decisions, including adjusting services strategies and tactics to facilitate market share growth.

• The benchmark identifies leaders, strategies and growth opportunities in the NIS industry to enable vendors to capture share from competitors and hold off rivals.

OpportunityGlobal enterprises (excluding telecom operators) spend $50+ billion annually on maintenance, deployment, professional and managed services for network infrastructure.

Content• The NIS Benchmark covers 11 suppliers in four services

segments across four major geographies.

o Highlights quarterly revenue, growth, margin, headcount, and geographic data

• Analysis of top three suppliers in each category

• Insight into vendor strategies and market trends

NIS

NIS Benchmark Overview

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Questions?

NIS Benchmark Highlights

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TECHNOLOGY BUSINESS RESEARCH, INC.

About TBR

Technology Business Research (TBR) is a leading independent technology market research and consulting firm specializing in the business and financial analyses of hardware, software, networking equipment, wireless, portal and professional services vendors.

Serving a global clientele, TBR provides timely and accurate market research and business intelligence in formats that are tailored to clients’ needs. Our analysts are available to further address client-specific issues or information needs on an inquiry or proprietary consulting basis.

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Network Infrastructure Services Webinar Deck

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Transcript of Network Infrastructure Services Webinar Deck