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Network management systems market hit harder than expected by economic downturn, says Analysys Mason

The network management systems (NMS) market generated US$4.2 billion in revenue in 2009, down by 8% from ...


May 26, 2010  


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The network management systems (NMS) market generated US$4.2 billion in revenue in 2009, down by 8% from US$4.6 billion in 2008, according to a new report from telecom adviser Analysys Mason.

 

Glen Ragoonanan, senior analyst, responsible for Analysys Mason’s Infrastructure Solutions research program and author of the report, says CSPs’ capex on infrastructure and NMS declined at a faster rate than anticipated in 2009. This primarily contributed to the decline of the NMS market.

 

Ragoonanan noted the following impacts of the recession on this market:

 

* Significantly reduced capital spend on network infrastructure by CSPs — fewer contracts with network equipment manufacturers (NEMs) and lower values

 

* Increased need by CSPs to reduce operational cos

 

* Headcount reductions announced by numerous CSPs and vendors

 

* Nortel’s bankruptcy, dismantling and sale of its CDMA/LTE, GSM and metro Ethernet businesses units

 

* Year-on-year decline of NMS revenue in North America and Western Europe

 

* Year-on-year decline suffered by all the NEMs, except for Huawei and ZTE

 

“Huawei’s and ZTE’s growth came from the high spending in the Asia–Pacific region. China contributed the largest spend in this region,” he said.

 

In spite of this, the NMS market remains highly consolidated. The same top-six NEMs had 83% of the total market in 2009. Ericsson continuing to lead with a share of 22%, followed by Alcatel-Lucent, Huawei, Nokia Siemens Networks and Cisco Systems with 18%, 17%, 14% and 7%, respectively.