Length: 60 Pages
Patrick has 25 years of experience in the telecommunications industry. He is Chief Analyst of Heavy Reading, but more specifically covers areas such as mobile backhaul networks and mobile network security... MORE
Gabriel leads mobile network research for Heavy Reading. Starting from a system architecture perspective, his coverage area includes RAN, core, and service-layer platforms... MORE
Jim leads Heavy Reading’s research on the impact of SDN, NFV and D-NFV on the control plane and application layers at the core and edge. This includes the evolution path of SIP applications, UC, IMS, SBCs, DSCs, IPX and WebRTC... MORE
Steve leads Heavy Reading's coverage of the Internet of Things (IoT) and related technologies, focusing on the evolution of the mobile Internet and its impact on digital life... MORE
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Length: 60 Pages
What we refer to as the Webscale Internet companies (WICs) – the likes of Google, Apple, Facebook, Microsoft and Amazon – are well established as the "big dogs" in high tech. And one consequence of the phenomenal growth of their businesses over the last few years has been the markedly increased influence they now exert not just in the market for communications services, but increasingly in the market for networking hardware, software and services that underpins it.
Telecom industry professionals have come to understand that the WICs are "leading in networking innovation"; that they are "increasingly calling the shots"; that some of them are increasingly "building out their own telecom infrastructure"; and that "it's a matter of time before one of these guys buys one of the big CSPs" [communications service providers].
Until now, the influence that the WICs exert over the telecom sector has remained largely undefined and unquantified. Webscale Internet Companies: New Drivers of the Network Equipment Market breaks new ground in bringing greater precision to an understanding of what the WICs are doing in the telecom networking space and where they are headed – both as a distinct set of customers with common requirements and as individual companies. The report also provides what we believe to be the first substantial attempt at quantifying the spending of the WICs in the networking space and hence what kind of market opportunity these companies represent for network equipment vendors in terms of both sales and margins attainable from those sales.
A Heavy Reading analyst team comprising Patrick Donegan, Chief Analyst; Gabriel Brown, Senior Analyst; Jim Hodges, Senior Analyst; and Steve Bell, Senior Analyst, with additional support from Roz Roseboro, Senior Analyst, spent a large part of 2Q16 undertaking primary and secondary research into the WICs and their evolving role in the networking ecosystem. Among those interviewed were more than a dozen leading network infrastructure professionals at leading CSPs at CTO, VP and director level; more than 25 senior individuals in network equipment vendors at CTO, VP and director level; several leaders in key telecom industry associations, standards bodies and other specialist consultancies; and some of the WICs themselves.
As part of our research methodology, the primary and secondary research that we conducted ourselves was complemented with a Heavy Reading online survey leveraging the Light Reading data base of registered readers. This was conducted in August 2016 and was primarily targeted at network equipment vendors, although a subset of the survey questions were also put to CSP respondents. The survey yielded responses from 82 qualified respondents in network equipment vendors and 57 from qualified respondents in CSPs.
Around half the 82 vendor respondents came from individuals from one vendor company. Around half came from vendors from whom two or more (but no more than four) respondents were forthcoming. Those companies from which two or more respondents were forthcoming were ADVA, Broadsoft, Casa Systems, Cisco Systems, Ericsson, F5, Huawei, HP, IBM, Infinera, Juniper Networks, Nokia, NetScout, Vasona Networks and Radisys.
Webscale Internet Companies: New Drivers of the Network Equipment Market describes, analyzes and quantifies the nature and extent of the influence that the WICs now exert on today's network equipment market, making it essential reading for anyone in the networking industry who wants to understand where these firms are at today, where they're headed, and what the implications are for how their own company engages with them in the telecom ecosystem.
Each section of this report provides the vendor context to a number of key questions about the role of the WICs as buyers, specifiers and influencers of the network equipment market; provides analysis of a key aspect of the market; and provides comparisons between the WICs and the CSPs that make up the vendors' traditional core customer base, enabling vendors to sharpen their positioning in relation to each customer set.
The report also provides new survey evidence of what the vendor community is currently thinking about the WICs and the impact on demand for their products and services. And it provides Heavy Reading's perspective and outlook on these same issues, comparing our perspective with that of vendors and CSPs in our survey, and explaining differences in perspective where they exist.
VIEW TABLE OF CONTENTS
VIEW TABLE OF FIGURES
VIEW EXECUTIVE SUMMARY AS PDF
As shown in the excerpt from our survey below, CSPs have no doubt which of the WICs poses the greatest competitive threat: 61 percent point to Google as posing the biggest competitive threat to their business. This likely reflects Google's plays in the network access space as much as, if not more than, its play in the communications services market.
Webscale Internet Companies: New Drivers of the Network Equipment Market is published in PDF format.