Analysys Mason's Recommendations to CSPs & Vendors for the $9.2B SDP Market

A new report by Glen Ragoonanan [pictured], Principal Analyst. and Gorkem Yigit, Analyst, Analysys Mason finds that:

• The service delivery platforms (SDP) market will grow from USD5.7 billion in 2014 to USD9.2 billion in 2019, at a 10% CAGR, thanks to the shift from spending on infrastructure to spending on SDP for existing and new digital services
   
• The main growth drivers are increased video consumption and the growing number of connected smart devices (customers often have more than one)
   
• The availability and affordability of virtualised SDP solutions will drive spending despite lower price points than traditional SDP systems.

Analysys Mason's Recommendations for CSPs:

1. CSPs need to develop new ‘personalised’ (customisable) digital services using an integrated SDP approach
    
2. CSPs should invest in SDPs that optimise and monetise video services and in scalable SDM systems for IoT
    
3. CSPs should virtualise SDP network functions to improve scale and reduce costs

And for vendors:

1. Suppliers should incorporate NFV and SaaS into their CSP SDP solutions to enable faster and more cost-effective delivery of new digital economy services
    
2. Next-generation unified communications (voice, messaging and video) service delivery should be the foundation of TAS offerings
    
3. Growth in video and IoT devices will drive the need for scalable CMD and SDM platforms, increase the number of policy management use cases and investments, and drive supplier ecosystem growth or M&A

See "Service delivery platforms: worldwide forecasts 2015–2019" - here.

[Infonetics]: Business Analysis of the 5 Leading SDP Vendors

 
A recent survey by Shira Levine, research director for service enablement and subscriber intelligence. IHS "profiles and analyzes the top 5 SDP software vendors as identified by service providers: Ericsson, HP, Huawei, OpenCloud and Oracle:

• Ericsson, Huawei and Oracle have all built strong portfolios, both organically and via acquisition, around the SDP opportunity, and that is reflected in their leadership positions in this year’s scorecard.  However, as the market shifts toward emerging opportunities such as API platforms and alternative delivery models, these established players may get a run for their money from smaller suppliers with a more targeted focus, 
   
• Ericsson’s longstanding presence in the wireless industry in general—and SDP market specifically—helps it land a leadership position
   
• Huawei ramped up in the SDP space quickly, gaining market share by selling into developing regions
   
• Oracle enjoys strong financials, a solid customer base, and a reputation for reliability and support which have helped the company maintain a leadership standing in SDP
   
• Despite a solid roster of customers, HP is struggling in the SDP market as it addresses financial issues and revamps its product suite
   
• Smaller player OpenCloud continues to grow by positioning itself as a less expensive and more innovative option to the larger SDP suppliers

See "IHS Names Ericsson, Huawei and Oracle Leaders in Service DeliveryPlatform Scorecard" - here.

[Analysys Mason]: No Change in the $5.8B SDP Market Leaders

A new report by Glen Ragoonanan [pictured], Principal Analyst, and Gorkem Yigit,Research Analyst, Analysys Mason finds that "The service delivery platform market generated USD5.8 billion in revenue worldwide in 2014, up 11% from USD5.2 billion in 2013. LTE's impact on the overall service delivery platform (SDP) market increased, first in subscriber data management (SDM), then policy management (PM), followed by mobile content management and delivery (CMD), and finally, telecoms application servers (TAS) for mobile data and VoLTE services. Virtualised SDPs were being introduced in 2014.

.. the top-five SDP vendors were unchanged. Amdocs returned to the top six, thanks to a severe decline in Cisco's fixed CMD (FCMD): 

• Ericsson retained its leadership with 9% year-on-year revenue growth – primarily in the content management and delivery (CMD) sub-segment thanks to its acquisitions of Azuki Systems, Fabrix Systems, as well as Microsoft Mediaroom, which forms part of its Media Delivery Network (MDN) solution portfolio. Its other SDP revenue grew, though slower than the overall SDP market
    
• Huawei Technologies achieved the highest organic growth – 30% year-on-year – thanks to strong growth in the number of LTE subscribers in China because all three major communication service providers (CSPs) are rolling out LTE. It continued to win SDP business from other vendors in EMEA
   
• Nokia Networks’ revenue only grew by 5% year-on-year, compared with 11% for the overall SDP market. It remained the SDM leader, enjoying wins worldwide. Its acquisition of Alcatel-Lucent could make it the SDP market leader
    
• Alcatel-Lucent’s revenue growth declined by -7% year-on-year as it restructured and refocused on network virtualisation and VoLTE, which were not significant drivers of SDP spend in 2014
    
• Oracle had low 4% year-on-year organic growth, compared with 35% inorganic growth in 2013, when it acquired Acme Packet and Tekelec
   
• Amdocs’ SDP revenue growth was flat in 2014, which reduced its market share, compared with 2013. It re-entered the top-six thanks to Cisco’s decline in fixed CMD (FCMD).

See "Service delivery platforms: worldwide market shares 2014" - here.

[Survey]: OTT Partnerships Drive SDP Deployments; Oracle, Ericsson, Huawei Lead

A new survey of "21 convergent, mobile and cable operators" by Shira Levine, research director for service enablement and subscriber intelligence, IHS (Infonetics Research) finds that "nearly half of respondents identified supporting partnerships with over-the-top (OTT) providers and better monetization of subscriber data as very important drivers behind their service delivery platform (SDP) deployments .. Operators continue to deploy long-standing use cases such as messaging and single sign-on via their SDPs, but they are increasingly looking to expand the capabilities the SDP to support new use cases including partnerships with OTT providers and better monetization of subscriber data” 

• The majority of respondents have deployed their SDPs on-premises with commercially-available hardware, though virtualized deployments on shared hardware and via an internal cloud are most likely to be under evaluation
   
• Consequently, support for deployment on commercially-available hardware came in relatively high on the list of key criteria for SDP suppliers, although product reliability and support capabilities topped the list
   
• Oracle is the SDP supplier cited as a leader by a majority of survey participants, with Ericsson and Huawei following closely behind [links are for product pages]

See "OTT Partnerships, Subscriber Data Monetization Top Reasons Operators Deploy Service Delivery Platforms" - here.

[Analysys Mason]: Telco S/W Market to Reach $34.2B in 2018

A new report by Analysys Mason finds that (see also "[Anaylsys Mason]: Ericsson and Amdocs Led the Telecom Software Market in 2013" - here]:

• The worldwide telecoms software market is forecast to grow from USD25.1 billion in 2013 to USD34.2 billion in 2018, at a CAGR of 6.4%.
   
• LTE network upgrades worldwide are driving spending in OSS/BSS. Investments in North America (NA) and Western Europe will decline initially as deployments are completed, but software revenue will be sustained over the forecast period by increased spending in emerging markets.
   
• The service delivery platform (SDP) market is the fastest-growing telecoms software segment, at a CAGR of 10.1%, driven by take-up and usage of mobile data services.
   
• Network function virtualisation (NFV) will begin to impact the industry during the mid-to-late forecast period, driving the need for new OSS/BSS solutions that can support both the virtualised and traditional network environments.
  

See "Telecoms software: worldwide forecast 2014–2018" - here.

[Infonetics]: Ericsson Scores as Best SDP Vendor

A new vendor scorecard report by Shira Levine, directing analyst for service enablement and subscriber intelligence, Infonetics Research (new logo on the right) "ranks the 5 largest global vendors of service delivery platform (SDP) software: Ericsson, HP, Huawei, OpenCloud, and Oracle"

The report finds that “Based on completely quantitative metrics, including financial information, product capabilities and service provider feedback, we named Ericsson the top vendor in the service delivery platform (SDP) software market, with Oracle following close behind .. Ericsson scored particularly well on service and support and product reliability, and Oracle received high ratings on financial stability and solution breadth. Both companies, however, scored below average when it came to pricing .. Key to #2 Oracle’s continued success in the SDP software market will be its ability to capitalize on the demand for enterprise applications and services, including machine to machine"

See "Ericsson and Oracle shine in new service delivery platform scorecard" - here.

[Analysys Mason]: SDP Market (Incl. PCC) Generated $5.2B in 2013

According to a new report by Glen Ragoonanan [pictured], Principal Analyst, and Gorkem Yigit, Research Analyst, Analysys Mason "The service delivery platforms (SDP) market generated USD5.2 billion in revenue worldwide during 2013, up 12% from USD4.6 billion in 2012. In 2013, communications service providers (CSPs) spent on service delivery platforms (SDP) solutions to monetise LTE and FTTx infrastructure investments. Voice (IMS/VoLTE) and video (multi-screen) services also continued to drive CSPs’ SDP spending as they compete with over-the-top (OTT) providers. 

Analysis Mason's SDP refers to "four application sub-segments: telecoms application servers (TAS), content management and delivery (CMD): fixed (FCMD) and mobile (MCMD), policy management (PM) and subscriber data management (SDM)"


The top-five suppliers in this market were the same as in 2012, thanks to numerous acquisitions. Ericsson maintained its leadership, followed by Huawei Technologies, Nokia Solutions and Networks, Alcatel-Lucent, and then Oracle.

According to the above charts, vendors' revenues for 2013 (subject to rounding errors) have been:

See "Service Delivery Platforms: Worldwide Market Shares 2013" - here.

[Analysys Mason] CSPs Spent 6.3% of Revenues on IT (39% of Capex)

A new report by Dean Ramsay, Larry Goldman [pictured] and Justin van der Lande, Analysys Mason finds that "USD127 billion was spent worldwide on telecoms IT in 2012. This spending represented an average of 6.4% of overall telecoms revenue of more than USD2 trillion .. IT spending accounted for only 10% of opex and 39% of capex worldwide in 2012".

"Spending on OSS/BSS accounted for 50% of IT spending worldwide – USD63 billion in 2012, up by 3% year-on-year. Just over one third of IT spending in 2012 (USD48 billion) was spent by the CTO or network/product group, on SDPs and apps, and on network management systems (NMSs)".

See "IT spending by communications service providers worldwide 2012" - here.

[Infonetics]: SDP Systems ($6B Market by '17) Need API Exposure

A new report by Shira Levine [pictured], directing analyst for service enablement and subscriber intelligence, Infonetics Research finds that "Increasingly, operators are deploying service delivery platforms (SDPs) as a bridge between their existing and next-generation service efforts .. Business-to-business applications are growing in popularity, notably enterprise app stores and vertical-specific apps for telemedicine, smart grid, and telematics .. API exposure continues to be a hot topic in the SDP space, as operators look to capitalize on assets such as call control, payment systems, and subscriber information by providing secure access to both internal developers and third-party providers"

See also:

• [Infonetics]: $3.6B SDP Market Led by Oracle and Huawei (here) 
• [Analysys Mason]: SDP Market $4.6B for 2012; Ericsson Leads" (here)
• Infonetics 2012 forecast ($5.8B for 2016 vs. $6B for 2017 in 2013 report) - here.

"On the vendor front, Alcatel-Lucent and NSN have backed away from the SDP market, and M&A activity is heating up: Intel acquired Aepona and Mashery, and CA purchased Layer 7"

See "APIs playing key role in service delivery platform and M2M markets" - here.

[Analysys Mason]: CSPs will begin investing in SDP; Market to Reach $7.3B by 2017

 
A new report by Anil Rao, Analyst, and Glen Ragoonanan [pictured], Senior Analyst, Analysys Mason forecasts that "Efforts to launch new services and win more subscribers in order to monetise mobile and fixed broadband networks will drive SDP spending to grow at a CAGR of 9.5% over the next five years .. Over the forecast period, CSPs will begin investing in SDP systems to explore and enable new digital service opportunities and business models, as they adapt to changes in the telecoms value chain. Customer experience management (CEM), analytics, and content and over-the-top (OTT) partnering to deliver bundled or integrated, competitive, 'anywhere' cloud services, as well as machine-to-machine (M2M) and digital home services (such as home security and m-health) will not have a significant impact until 2016 onwards".

According to Infonetics Research (March 2013), the SDP market forecast to reach $5.9B in 2017, from  $3.6B in 2012 [see "[Infonetics]: $3.6B SDP Market Led by Oracle and Huawei" - here].

See "Service delivery platforms: worldwide forecast 2013–2017" - here.

[Analysys Mason]: SDP Market $4.6B for 2012; Ericsson Leads

A recent report by Anil Rao, Analyst and Glen Ragoonanan (pictured), Senior Analyst, Analysys Mason finds that "In 2012, communications service providers (CSPs) spent on SDP development to monetise the network investments they made in 2011. The top six suppliers in this market remained the same. Ericsson maintained its leadership of the SDP market in 2012, taking a 16% share of worldwide revenue. The top six suppliers – which also included Alcatel-Lucent, Amdocs, Huawei Technologies, Nokia Siemens Networks and Oracle – accounted for 61% of the revenue in the SDP market, which is consolidating as a result of acquisitions". 

Infonetics recent report (here) claimed a $3.6B in 2012, with Oracle as a leader.

See "The service delivery platforms (SDP) market generated USD4.6 billion in revenue worldwide during 2012, up 7% from USD4.3 billion in 2011" - here.

[Infonetics]: $3.6B SDP Market Led by Oracle and Huawei

A new research by Shira Levine (pictured), directing analyst for service enablement and subscriber intelligence, Infonetics Research concludes that "The SDP opportunity is alive and well, but looks very different than it did even a few years ago. Very few operators are investing in soup-to-nuts service delivery platforms anymore. Instead, they’re implementing discrete components of the SDP (like network exposure and web service environments) that allow them to deliver new services while reducing operational costs".

• In 2012, the global SDP software and services market totaled $3.6 billion, up 14% over 2011 .. forecast by Infonetics to reach $5.9 billion in 2017
  
  Last years' Infonetics report forecasted a $5.8B market already for 2016 (here).
   
• SDP services are expected to make up 75% of the SDP market by 2017
   
• A handful of large suppliers continue to dominate the SDP landscape: Oracle leads the software segment, followed closely by Huawei; meanwhile on the services side, Ericsson pulled ahead of Huawei for 1st place

See "Service delivery platform (SDP) market nearing $6 billion in 2017" - here.

[ABI] CEM Market $1.3B; Needs Policy and DPI; HP, IBM, Amdocs Lead

A recent research by Aditya Kaul (pictured), practice director, ABI Research concludes that "..  it’s only recently that CEM has been applied in mobile .. sizes the CEM opportunity in 2013 at $1.3 billion across the network and IT domains, although roughly 80% of the market is dominated by the IT domain in areas like BSS/OSS, CRM, and SDP"

“The Mobile CEM landscape today is dominated by IT vendors such as HP, Amdocs, and IBM which are leveraging strengths in IT combined with a heavy focus on customer analytics and data mining. However, for CEM to succeed, the network piece including network monitoring, optimization, DPI and policy, has to go hand-in-hand with the IT piece, which is where traditional network vendors come in .. Ultimately, CEM only becomes relevant if done end-to-end, with a single point of ownership within the carrier; something like a NASA mission control with a CEM commander at its helm, having multiple views across Network and IT domains.”

See "Customer Experience Management for Mobile Is a Billion Dollar Market Opportunity in 2013, Spanning Both Network and IT Domains" - here.

[Analysys Mason]: Telecom Software Market Grew by 6.4% in 2011; Amdocs Leads

A new report by Analysys Mason finds that "The value of the worldwide telecoms software market grew by 6.4% (or USD1.38 billion) between 2010 and 2011, from USD21.48 billion to USD22.86 billion. The overall market is highly fragmented: the top-six suppliers accounted for just 48.2% of the total market, and no supplier had a share of more than 11.0%".

Software segments included are service assurance, service fulfillment, revenue management, network management systems, service delivery platforms and customer care.

"Amdocs has retained its position as the largest vendor in terms of revenue, with an overall market share of 10.5%".

See "TELECOMS SOFTWARE: WORLDWIDE MARKET SHARES 2011" - here.

How do CSPs Spend IT Budget?

   
A new report by Johanne Mayer (pictured), Senior Analyst, and Larry Goldman, Partner, Head of Telecoms Software Research, Analysys Mason concludes that "Communications service providers (CSPs) spent USD119 billion on telecoms IT worldwide in 2010, which represents 6.2% of the telecoms revenue of USD1.9 trillion". 

"Our analysis shows that incumbent CSPs with fixed and mobile services spend seven times more than any other type of CSP (that is, fixed- or mobile-only) and that mobile CSPs in developed countries spend USD26 per subscriber per year on IT, compared with USD4 per subscriber per year for those in emerging countries".
 
"Spending on OSS/BSS accounted for half of total IT spending worldwide – USD59 billion in 2010 .. One-third of the money CSPs spent on IT in 2010,USD38 billion, was spent by the CTO or network/product group on SDPs and apps, and on network management systems (NMSs)".

See "A large portion of IT spending does not fall under the traditional IT budget: a third comes from the network or CTO budget" - here.

Analysis Mason: "CSPs are uncertain of the ROI of many innovative policy use cases"

An updated report by Glen Raggoonanan (pictured), Senior Analyst, Analysys Mason condlues that "The SDP market generated USD3.84 billion in revenue in 2011, up from USD3.73 billion in 2010. Revenue grew by 3% year-on-year, as CSPs concentrated on internal SDP development, instead of buying from vendors. Spending on internal development is not included in our market shares and forecasts .. The addition of SDM to the SDP segment has increased the market shares of the network equipment manufacturers ..Most policy charging and rules function (PCRF) deployments addressed basic policy use cases".

Compare Analysis Mason's market size to Infonetics Research report  "SDP Market to Grow from $3.2B in 2011 to $5.8B in 2016" - here and market share data (chart below) to "Operators' Survey Shows that Huawei, Ericsson, HP, IBM, and Oracle are Top SDP Supplies" - here.

"Policy management innovation saw variable investment:

• Zero-rating Facebook and ‘happy-hour’ PM use cases were the most common mobile data service offerings.
• PM deployments supported SDM growth with implementation of adjunct low-latency SPR databases for real-time policy control by specialist policy vendors.
• There were few innovative policy deployments in Africa for ‘idle’ cell discounts and Verizon Wireless’s Turbo Button.
• CSPs were (and still are) uncertain of the ROI of many innovative policy use cases, such as parental control.

See "Service delivery platforms (SDP) generated USD3.8 billion in revenue worldwide during 2011, up 3% from USD3.7 billion in 2010" - here.

[Infonetics]: Operators' Survey Shows that Huawei, Ericsson, HP, IBM, and Oracle are Top SDP Supplies

A new survey of operators’ service delivery platform deployment strategies by Shira Levine (pictured), directing analyst for next gen OSS and policy at Infonetics Research, finds that:

"In an open-ended question asking operators who they consider to be the top three SDP vendors, operators most often named Huawei, Ericsson, HP, IBM, and Oracle (Oracle held the top spot in Infonetics’ 2011 SDP survey - here). .. Operators ranked Oracle highest for SDP technology, and ranked IBM and Accenture highest for their business modeling capabilities, likely reflecting their cross-industry experience with process management".

See also "[Infonetics]: SDP Market to Grow from $3.2B in 2011 to $5.8B in 2016" - here and "[Current Analysis] SDP Market Portfolio Assessment: Ericsson Leads, Oracle Missing" - here.

"API exposure was the name of the game in this year's survey, with operators naming it as a top application and business driver behind their SDP investments".

See "Operators name Huawei, Ericsson top SDP suppliers" - here.

[Infonetics]: SDP Market to Grow from $3.2B in 2011 to $5.8B in 2016

A new research by Shira Levine, Infonetics Research’s directing analyst for next gen OSS and policy, finds that "The global service delivery platform (SDP) software and services market grew 16% between 2010 and 2011, to $3.2 billion .. Infonetics forecasts the SDP software and services market to hit $5.8 billion by 2016".

Previously Infonetics forecasted $5.2B for 2015 (here). Analysys Mason's most recent forecast is $6.3B for 2015 (here).

  

"Ongoing capital constraints are driving operators’ interest in service delivery platform solutions that go beyond the traditional software licensing model .. We’re seeing growing demand for alternatives such as cloud-based delivery, turnkey application storefronts for consumer and enterprise customers, and revenue-sharing models, and we expect that trend to continue as operators look to create a more predictable cost structure around their SDP deployments" 

  

More highlights:

The SDP market is experiencing double-digit percent annual growth in large part due to operator interest in: 

• Developing app stores – not just for consumers but increasingly for enterprises, such as those in the M2M, healthcare, retail, manufacturing, education, and transportation verticals
• Offering customized mobile advertising
• Managing exploding levels of content downloads by mobile broadband subscribers
• Developing API exposure strategies that enable them to create a richer ecosystem of content partners 

See "App stores and enterprise drive service delivery platform (SDP) spending" - here.

[Analysys Mason] SDP Market to Reach $6.3B in 2015

   

Peter Mottishaw, Principal Analyst, Analysys Mason published its SDP market review.

"The worldwide service delivery platform (SDP) market was worth USD3.6 billion in 2010, and will grow at a CAGR of 11.7% to reach USD6.3 billion in 2015"  (see chart)

"In developed markets, the main driver for SDP spending is the need to launch new services and create new revenue streams in order to remain competitive. Communications service providers (CSPs) will invest in SDP solutions to enable new business models that can adapt to changes in the telecoms value chain" [See table below].

A month ago Peter said that "The service delivery platform (SDP) market generated USD3.63 billion in revenue in 2010, up 7% from USD3.38 billion in 2009" (here)

According to Infonetics - "SDP Spending will Reach $5.2B in 2015" - here.

See "Service delivery platforms: worldwide forecast 2011–2015" - here.

[Analysys Mason]: SDP Market Slow Due to Delays to Real-time Charging Projects

   

A new report by Peter Mottishaw (pictured), Principal Analyst, Analysys Mason finds that "The service delivery platform (SDP) market generated USD3.63 billion in revenue in 2010, up 7% from USD3.38 billion in 2009 [here]. Growth was lower than expected because of delays to real-time charging projects in some emerging markets and to investments in mobile device management, caused by the slow growth in related services for communications service providers (CSPs)".

See "Service delivery platforms: worldwide market shares 2010" - here.

See also:

• Infonetics: SDP Spending will Reach $5.2B in 2015; Oracle Leads - here 
• [Current Analysis] SDP Market Portfolio Assessment: Ericsson Leads, Oracle Missing - here