Spending on services in support of enterprise networks and customer premises equipment totaled $216.4 billion in 2003 and is expected to increase 13.9% to $246.5 billion in 2004, according to the Telecommunications Industry Association's 2004 Telecommunications Market Review and Forecast.
Healthy double-digit growth is predicted to continue at a 15.5% compound annual growth rate from 2004-2007, reaching $384.9 billion in 2007.
The market for service and support of customer premises equipment and enterprise network systems has grown dramatically in recent years and is expected to continue with the rebound in spending on voice and data equipment. Convergence, the development of new products and technologies, the adoption of open standards, and increased interoperability of equipment from different vendors have increased the options available to enterprise network managers. These developments have also increased the expertise needed to design, integrate and customize systems to meet enterprise needs.
"Not only has new and improved technology fueled the demand for support services, but enterprises have increasingly looked outside for IT support in order to streamline operations and improve profits," says TIA President Matthew Flanigan. "Since it is difficult for in-house staff to keep up with the latest developments and available solutions, enterprises have turned to professional service providers to help them design, install, maintain, repair, integrate and support their network systems. Consequently, you will continue to see a steady stream of spending in this market category."
The market for servicing and maintaining equipment comprises three categories: basic service and support; professional services; and depot repair, logistics and other services. Basic service and support consists of field maintenance and repair and help desk and technical support. Professional services -- the largest of the three categories -- cover planning and design, installation and integration, education and training, network consulting, software support, continuity and disaster recovery, and network management. Depot repair, logistics and other support services include depot repair, upgrades, moves, adds and changes, and turnkey services.
Spending on services supporting enterprise network systems (data) will make up almost 83% of the market with $204.3 billion in spending expected in 2004, compared with $42.2 billion for customer premises equipment services (voice).
Furthermore, services spending to support enterprise network systems will continue to outpace that for customer premises equipment support services, with a compound annual growth rate of 16.6% vs. 9.8%. Services spending in support of enterprise network systems is projected to reach $328.7 billion in 2007, compared with $56.2 billion for CPE support services.
The TIA is based in Arlington, VA. For more information visit www.tiaonline.org.
