North American Enterprise Telephony Implementation
and Management Services Market
Advancements in Internet Protocol (IP)Technology Spark Interest in Managed Services
Contents
Section Slide Numbers
Executive Summary 8
• Executive Summary 9
• Market Engineering Measurements 11
• CEO’s Perspective 13
Market Overview 14
• Definitions 15
• Key Questions This Study Will Answer 22
• Segmentation by Country 23
• Segmentation by Service Type 24
• Segmentation by Business Size 25
• Segmentation by Business Size Discussion 26
• Distribution Channels 27
• Distribution Channels Discussion 28
External Challenges: Drivers and Restraints—Total Market 29
Contents
Section Slide Numbers
• Drivers—Explanation 31
• Restraints—Impact and Duration 36
• Restraints—Explanation 37
Forecasts and Trends—Total Market 41
• Market Engineering Measurements 42
• Forecast Assumptions 44
• Total Enterprise Telephony Implementation and Management Services Market
Revenue Forecast 46
• Revenue Forecast Discussion 47
• Total Enterprise Telephony Implementation and Management Services Market
Percent Revenue Forecast by Service Type 48
Demand Analysis—Total Market 49
• Degree of Influence 50
• Users of Managed Services 51
• Non-Users of Managed Services 52
• Perceived Managed Services Benefits 53
Contents
Section Slide Numbers
Market Share and Competitive Analysis—Total Market 55
• Market Share 56
• Competitive Environment 57
• Top Competitors—SWOT Analysis 58
• Competitive Factors and Assessment 59
• AT&T Profile 60
• Arrow S3 (Shared Technologies) Profile 62
• Avaya, Inc. Profile 64
• Black Box Network Services Profile 66
• Cisco Systems, Inc. Profile 68
• Mitel Networks Corporation Profile 70
• NEC Corporation of America Profile 72
• Verizon Business Profile 74
Contents
Section Slide Numbers
• Installation and Professional Services Segment—Revenue Forecast Discussion 78
Contractual Maintenance Services Breakdown 79
• Contractual Maintenance Services Segment—Revenue Forecast 80 • Contractual Maintenance Services Segment—Revenue Forecast Discussion 81
Managed Services Breakdown 82
• Managed Services Segment—Revenue Forecast 83
• Managed Services Segment—Revenue Forecast Discussion 84
Time and Material Services Breakdown 85
• Time and Material Services Segment—Revenue Forecast 86 • Time and Material Services Segment—Revenue Forecast Discussion 87
The Last Word 88
• Three Big Predictions 89
Appendix 91
Contents
Section Slide Numbers
• Other Competitors 93
• Avaya, Inc. Profile (continued) 94
Executive Summary
• The North American enterprise telephony implementation and management services market returned to positive growth in 2010.
• Total market revenue rose by x.x percent, from $x.xx billion in 2009 to $x.xx billion in 2010. In 2008, revenue had reached $x.xx billion, but then declined at (xx.x) percent in 2009 due to the tough economic climate.
• Total market growth in 2010 was fueled primarily by the increasing adoption of Internet Protocol (IP) communications platforms and endpoints within the enterprise space.
• In 2010, the North American enterprise telephony systems market shipped xx.x million lines - a growth rate of xx.x percent from the previous year.
• North America continues to represent the most mature enterprise communications market, with around xx.x percent penetration of IP telephony platforms and endpoints.
• Although time division multiplexing (TDM) line license shipments grew in 2010, upcoming decline is expected in the coming years as customers continue to acknowledge the value of IP communications and vendors gradually phase out legacy TDM private branch exchange (PBX) and key telephone systems (KTS).
• Going forward, continued infrastructure refresh will drive demand for implementation services. Moreover, the growing complexity of enterprise communications environments (converged, multi vendor, multi endpoint networks, greater bandwidth requirements) will encourage enterprises to outsource management of their on-premises equipment to skilled service providers.
Executive Summary
• Furthermore, the growing consideration for advanced Unified Communications and Collaboration (UCC) technologies is positively impacting the professional and managed services market as customers begin to recognize an internal knowledge gap with regard to design, planning, implementation and on-going upkeep of these technologies, and tend to hire professional and managed service providers to complete these tasks.
• Frost & Sullivan expects professional services to slowly decline as cloud communications increasingly gain traction, but it will not be until 2016 and 2017 when cloud, hosted and software-as-a-service (SaaS) solutions will begin to have a significant impact on premises-based system shipments and related services.
• Contractual maintenance revenue growth will remain positive in the short and medium term, however, maintenance revenue will gradually decrease as customers migrate to IP-based communications environments and adopt managed services.
• A Frost & Sullivan survey shows that xx.x percent of non-managed services users expect that they will likely implement managed services in the next 12 months, and xx.x percent said they will definitely implement.*
• Top-tier professional and managed services providers include: Avaya and Black Box Networks. The second tier includes the following companies: Arrow S3, AT&T, Cisco, Mitel, NEC, and Verizon. Finally, IBM, Siemens Enterprise Communications and ShorTel are showing strong growth in this market.
* 2011 Investment Decisions in Communications and Collaboration Products and Services among North American Decision Makers (for more information click here).
Market Overview—Segmentation by Country
United States xx.x% Canada
x.x%
Percent Sales Breakdown by Country
Total Enterprise Telephony Implementation and Management Service Market, North America, 2010
Note: All figures are rounded. The base year is 2010. Source: Frost & Sullivan analysis.
Market Overview—Segmentation by Service Type
Note: All figures are rounded. The base year is 2010. Source: Frost & Sullivan analysis.
xx.x xx.x xx.x xx.x xx.x xx.x xx.x xx.x 0.0 xx.x xx.x xx.x xx.x xxx.x 2006 2010 R ev en u e (% ) Year
Installation and Professional Services Managed Services
Contractual Maintenance Time and Material
Key Takeaway: Managed services are gaining traction due to the increased adoption of IP-based communications platforms.
Market Overview—Segmentation by Business Size
Large xx.x Medium xx.x% Small xx.x%Percent Sales Breakdown by Business Size
Total Enterprise Telephony Implementation and Management Services Market: North America, 2010
Note: All figures are rounded. The base year is 2010. Source: Frost & Sullivan analysis.
Key:
Small: 5-100 employees Medium: 101-500 employees Large: more than 500 employees
The large enterprise space continues to be the primary adopter of these services. These customers tend to deploy more complex communications systems and require the
expertise of professional and managed service providers. Additionally, SMBs are more price sensitive than large
