MSP Today Expert Feature
August 03, 2012

Manufacturer-Provided Services for Enterprises Expected to Become $25B Market by 2016: Infonetics

Manufacturer-provided services for enterprises are predicted to become a $25-billion market by 2016, according to a new Infonetics (News - Alert) Research study.

Revenue from manufacturer-provided maintenance and support, professional services, and hosted and managed services increased nine percent during 2011, reaching $17 billion, the study also showed.

The “Manufacturer-Provided Services for Enterprises” study follows revenue that communication, network infrastructure, and security product makers get from hosted and managed services, maintenance and support, and network infrastructure. They are offered to such enterprise customers as small-to-medium-sized businesses, as well as government agencies.

"Services already make up a sizeable chunk of manufacturers' overall revenue, and the share of services will grow robustly over the coming years as vendors embrace a holistic approach to technology delivery," Matthias Machowinski, an analyst at Infonetics Research (News - Alert), said in a recent statement from the firm. "One of the key growth segments is hosted services, which many vendors are starting to offer to deliver technology in any fashion, including both CPE and cloud-based models, and to respond to shifts in customer preferences."

The study also found that the biggest generation of revenue is in maintenance and support. It is increasing the slowest among the different categories, it was shown. It was also predicted that revenue from advanced services, which includes professional, hosted and managed services, will increase by a double-digit compound annual growth rate through 2016, the study adds.

It was revealed, too, that makers of network infrastructure derive the largest revenue from services. Communications vendors – which include makers of phone systems, unified communications and videoconferencing equipment – are projected to capture the top spot in a few years.

At this point, Cisco has the top spot in the manufacturer-provided service market. Avaya and Siemens (News - Alert) follow Cisco. After these three, hundreds of vendors have market share of single digits or lower.

The report follows Alcatel-Lucent, Avaya, Brocade, Cisco, F5, HP, Huawei, Juniper, McAfee, NEC, Polycom, Riverbed, Siemens, Symantec (News - Alert), and other companies.

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Edited by Brooke Neuman