Operators see enterprise services revenue rise 6% in Q1: TBR

26 Jul 2017

Revenue from the enterprise communications services segments grew 6.6% year-to-year during the first quarter, spurred by demand for VPN, Ethernet and software-mediated network services such as SD-WAN, said Technology Business Research (TBR) in its latest Enterprise Operator Benchmark.

The research firm said carriers are aggressively investing in software-mediated network solutions, 5G and IoT to remain competitive as enterprises realize the benefits offered by these technologies over the next five years.

“The main justification for investment in NFV and SDN by operators is the incremental revenue-generation opportunities and cost savings these technologies provide,” TBR analyst Steve Vachon said.

“Offering software-mediated network services is becoming a necessity for enterprise operators to maintain market share, as most benchmarked companies have either commercially launched or announced plans to offer SD-WAN services.”

IT services remained the largest enterprise segment in the quarter with combined revenue among benchmarked companies rising 4.7% year-to-year to $12.5 billion due to growth in IoT, cloud and security.

Pricing pressures, particularly in US, have caused some carriers to move entirely from the IaaS market, such as Verizon divesting its remaining cloud business to IBM.

Carriers including BT, CenturyLink and AT&T are becoming more willing to play a supportive role to pure plays such as Amazon Web Services, concentrating on augmenting broader hybrid IT environments by providing network connectivity, security and orchestration platforms instead of serving as the IaaS provider.

The benchmark also examines key investment areas operators are targeting to enhance their enterprise portfolios including 5G, data centers and the deployment of IoT network technologies including LTE-M, NB-IoT and LoRa.

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