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The decrease in broadband costs has helped in fueling the demand
for cost-effective communication solutions based on broadband. With the
enterprises today demanding value added offerings on top of pure bandwidth play,
the enterprise broadband market has shifted from pure bandwidth play to services
and solutions. Today, all major service providers are already offering
applications such as MPLS, IP VPN, IP Telephony, IP conferencing, security,
managed services, ASP services, bandwidth on demand, co-location, hosting
services, etc. Thereby, providing the vendors and service providers a whole new
avenue for incremental revenues. As vendors gear up with newer service
offerings, it's the right time for enterprises to eye enhanced broadband
applications.
Over the next 1-2 years, as the market becomes more competitive,
CIOs will have a much broader range of offerings to choose from and at cost
effective price points. However, last mile delivery of services is a concern
area that is being taken care of, but still exists to some extent. In addition
to this, the packaging of services, consistency in quality, adherence to SLAs
and price points are going to be some of the key determinants shaping up the
enterprise broadband solutions market in the coming year.
Abundant Applications
A significant driver in the growth of broadband solutions and services is
the growing demand for bandwidth intensive applications including inter-office
business applications and converged solutions. The services vertical is emerging
as the biggest market of broadband applications, followed by manufacturing and
FMCG.
According to Atul Bindal, joint president, Broadband &
Telephone Services, Bharti Airtel, the rise in bandwidth and connectivity
requirements is today being generated by an increasing number of organizations
adopting Enterprise-wide Applications, WAN or inventory management besides using
bandwidth for e-mail, Internet access and inter-office communication. "In
the coming days we will see an increase in the convergence of voice, data and
video services with a rapid growth in network traffic," he adds. Overall,
triple play is emerging as a big catalyst in the growth of enterprise broadband
applications.
The availability of enhanced and a wider range of broadband
solutions in the market is further catalyzing the growth of broadband
applications in the enterprise. Hence, the growth in each is driving and pushing
the other.
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Current growth trends
indicate that the market is all set for a healthy, long innings. To get a
feel of the growth in enterprise broadband solutions and services market,
let's take a look at how the data services and managed services markets
have fared and their future growth potential.
As per Frost & Sullivan,
the overall data services market for enterprises in India aggregated Rs
2,560 crore in FY 2005-06 and is estimated to touch Rs 8,020 crore in
2009-10. Compounding an annual growth rate of 33% from 2005-2006 to
2009-10. Among the high growth segments in the data services market are
national leased line, IP VPN, IPLC and MPLS. MPLS is expected to grow
fastest among various data services technologies.
The enterprise market for
MPLS in India in 2005-06 stood at Rs 48 crore and is expected to reach Rs
217 crore in FY 2009-2010, a CAGR of over 45.5%. The IPLC service market
for large enterprises stood at $615 crore for FY 2005-06 and is expected
to grow to Rs 2,051 crore in FY 2009-10, a CAGR of approximately 35%. The
national leased line market aggregated Rs 680 crore in revenues in 2005-06
and is estimated to touch Rs 2,503 in 2009-10, at a CAGR of 38.5%. On the
other hand, the enterprise market for IP VPN in FY 2005-06 was worth Rs
300 crore and is expected to reach Rs 1,069 crore in 2009-2010. Thereby,
aggregating a CAGR of around 37.4% during the period.
In terms of the managed
services market, the segment aggregated a total market size of Rs 701
crore in FY 2005-2006 and is estimated to reach Rs 1,548 crore in 2009-10,
growing at a CAGR of 22%, as per Frost & Sullivan. Data centre, BCRS
and co-location are three of the fastest growing managed services in the
Indian market, growing at a CAGR of 24.4%, 24.5% and 20.4%, respectively,
during the time period between FY 2005-06 and 2009-10. The data center
market is slotted to grow from Rs 240 crore in 2005-06 to Rs 575 crore in
2009-10, the BCRS market from Rs 185 crore in 2005-06 to Rs 445 crore in
2009-10, and the co-location services market from Rs 109 crore in 2005-06
to Rs 228 crore in 2009-10. The need for uninterrupted business
functioning, especially in the BFSI, IT/ITeS and government verticals is
leading to a high growth of BCRS in the managed services space. |
There are a host of next level of broadband applications in
enterprises that are now emerging on the scene in addition to those that are
already in the process of becoming mainstream. According to PK Saji, VP,
Technology, Sify, voice and video are the most used high-bandwidth broadband
applications which are real-time in nature. Bandwidth requirements are growing
mostly because of such applications. Some top of the list enterprise broadband
applications include video conferencing, video calling, netmeeting, VoIP,
virtual classroom and e-learning applications for corporate training, access to
content and knowledge base on demand in the corporate, etc.
Going forward, the enterprises are expected to deploy more IP
based bandwidth intensive applications like Unified Communications and
TelePresence. According to Shrikant Shitole, business development manager,
Service Provider, Cisco Systems-India & SAARC, over the last few years,
enterprises have been deploying IP based applications to drive greater
productivity and profitability. As a first step, they were increasingly using IP
based applications such as IP VPN and IP Telephony.
According to Bindal, in the coming days, VoIP and video
conferencing applications will emerge as the key applications driving enterprise
level broadband. "Enterprises today are moving towards communication
technologies like VoIP, videoconferencing and webconferencing, instant
messaging, thereby saving costs involved in travel and enhancing
productivity," he adds. With the growth in conferencing and collaboration
kind of requirements, there will be a further spurt in the demand for the video-
and webconferencing kind of applications.
Apart from these applications, the basic enterprise applications
are also a significant growth engine for broadband solutions. According to
Sourabh Kaushal, industry manager, ICT Practice, Frost & Sullivan, India,
enterprises are moving beyond ERP application and implementing to a host of
other applications like CRM, business intelligence, SCM, Inventory management,
intranets, etc which will need access, thereby warranting the need for high
bandwidth. Besides, organizations are increasingly moving to a centralized
architecture with the various offices connecting to applications residing in a
central database. This, again, is warranting the need for high bandwidth for
connecting.
Enterprise customers have also moved into extranet VPN solutions
connecting sales partners and agents into their VPN. Some more enterprise
applications requiring higher bandwidth, span across the spectrum ranging from
sales force productivity tools, order capture and status, live stock updates and
customer service. Organizations have adopted these in varying degrees based on
their focus and impact. Page(s) 1 2 3
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