Telecoms software professional services: worldwide market shares 2013

Transcription

1 Research Report Telecoms software professional services: worldwide market shares November 2014 Shanthi Ravindran, Glen Ragoonanan and Gorkem Yigit

2 2 Contents Slide no. 8. Executive summary 9. TSPS revenue is shifting between the different types of services and suppliers, which suggests that it is a very mature market 10. When the USD12.15 billion product-related services revenue is excluded, growth was flat because managed services declined to offset other growth 11. EMEA continued to have the largest TSPS market share, while NA and LATAM had the highest growth rate 12. Traditional TSPS models persisted, but CSPs are shifting their focus to analytics, CEM and innovation for new digital services 13. TSPS market summary by sub-segment [1] 14. TSPS market summary by sub-segment [2] 15. Recommendations 16. CSPs need innovative TSPS models that will enable them to increase revenue and maintain the customer experience, while reducing costs 17. Recommendations for CSPs 18. Recommendations for all types of supplier 19. Recommendations for NEPs, ISVs and IT suppliers 20. Recommendations for global and regional CSIs 21. Market definition 22. Telecoms software market segmentation 23. Infrastructure solution categories Slide no. 24. Telecoms software professional services sub-segment definitions [1] 25. Telecoms software professional services sub-segment definitions [2] 26. Telecoms software professional services sub-segment definitions [3] 27. Telecoms software professional services sub-segment definitions [4] 28. Definitions of telecoms software professional service supplier types 29. Business environment 30. CSPs focused on reducing costs and staying competitive, but displayed some signs of innovating in the TSPS market in 31. Revenue growth was highest in NA, but revenue declined in EMEA 32. Growth improved in APAC because of LTE deployments in emerging APAC and LTE upgrades in developed APAC, and growth returned to LATAM 33. Market shares 34. NEPs TSPS market shares in 35. Global CSIs TSPS market shares in 36. ISVs TSPS market shares in 37. IT suppliers TSPS market shares in 38. Regional CSIs TSPS market shares in 39. Business consulting revenue growth returned because of technology roll-outs and operational improvements 40. Network virtualisation disrupted the design consulting market, but CSPs continued to buy network design, planning and optimisation TSPS

3 3 Contents Slide no. 41. Product-related services revenue grew strongly large ISVs and NEPs dominated because CSPs began to favour COTS solutions 42. The systems integration market grew because CSPs needed to manage multi-vendor complexity introduced by new network deployments 43. Custom development attracted high spending to migrate legacy technology and in emerging areas that lack COTS solutions 44. Outsourced operations revenue declined because the number of new contracts fell and NEPs exited or restructured unprofitable contracts 45. Growth declined in hosted managed services revenue because Tier 1 CSPs used their own clouds for analytics, cloud computing and IoT/M2M 46. Vendor analysis 47. Accenture 48. Alcatel-Lucent 49. Amdocs 50. Atos 51. Capgemini 52. CGI Group 53. Cognizant 54. CSG International 55. Dimension Data (a subsidiary of NTT Group) 56. EMC 57. Ericsson Slide no. 58. Hewlett-Packard 59. Huawei 60. IBM 61. Infosys 62. NEC/NetCracker Technology 63. Neustar 64. Nokia Networks 65. Oracle 66. SAP 67. Tata Consultancy Services 68. Tech Mahindra 69. Tieto 70. Wipro 71. Vendor analysis summary [1] 72. Vendor analysis summary [2] 73. Vendor analysis summary [3] 74. Mergers and acquisitions 75. Mergers and acquisitions [1] 76. Mergers and acquisitions [2] 77. Mergers and acquisitions [3]

4 4 Contents Slide no. 78. Appendix: Supplementary data 79. Telecoms software professional services breakdown by region and supplier type 80. Telecoms software professional services breakdown by vendor type and sub-segment 81. Telecoms software professional services breakdown by CSI type and sub-segment 82. Telecoms software professional services revenue breakdown by supplier type and sub-segment 83. About the authors and Analysys Mason 84. About the authors [1] 85. About the authors [2] 86. About Analysys Mason 87. Research from Analysys Mason 88. Consulting from Analysys Mason

5 5 List of figures Figure 1: TSPS market shares by supplier type, worldwide, Figure 2: TSPS market shares by supplier, worldwide, Figure 3: TSPS market shares excluding product-related services revenue by supplier type, worldwide, Figure 4: TSPS market shares excluding product-related services revenue by supplier, worldwide, Figure 5: TSPS revenue by region, worldwide, Figure 6: Emerging business and technology factors influencing the TSPS market and models Figure 7: Telecoms software market segments Figure 8: Infrastructure solution categories Figure 9a d: Definitions of telecoms software professional services and its sub-segments Figure 10: Definitions of telecoms software professional service supplier types Figure 11: TSPS market shares by supplier, EMEA, Figure 12: TSPS market shares by supplier, NA, Figure 13: TSPS market shares by supplier, APAC, Figure 14: TSPS market shares by supplier, LATAM, Figure 15: NEPs TSPS revenue by supplier, worldwide, Figure 16: Global CSIs TSPS revenue by supplier, worldwide, Figure 17: ISVs TSPS revenue by supplier, worldwide, Figure 18: IT suppliers TSPS revenue by supplier, worldwide, Figure 19: Regional CSIs TSPS revenue by supplier, worldwide, Figure 20: Business consulting revenue by supplier type, worldwide, Figure 21: Business consulting revenue by supplier, worldwide, Figure 22: Design consulting revenue by supplier type, worldwide, Figure 23: Design consulting revenue by supplier, worldwide, Figure 24: Product-related services revenue by supplier type, worldwide, Figure 25: Product-related services revenue by supplier, worldwide, Figure 26: Systems integration revenue by supplier type, worldwide, Figure 27: Systems integration revenue by supplier, worldwide, Figure 28: Custom development revenue by supplier type, worldwide, Figure 29: Custom development revenue by supplier, worldwide, Figure 30: Outsourced operations revenue by supplier type, worldwide, Figure 31: Outsourced operations revenue by supplier, worldwide, Figure 32: Hosted managed services revenue by supplier type, worldwide, Figure 33: Hosted managed services revenue by supplier, worldwide, Figure 34: Accenture s TSPS revenue by sub-segment, worldwide, Figure 35: Accenture s TSPS revenue by region, worldwide, Figure 36: Alcatel-Lucent s TSPS revenue by sub-segment, worldwide, Figure 37: Alcatel-Lucent s TSPS revenue by region, worldwide, Figure 38: Amdocs TSPS revenue by sub-segment, worldwide, Figure 39: Amdocs TSPS revenue by region, worldwide, Figure 40: Atos s TSPS revenue by sub-segment, worldwide, Figure 41: Atos s TSPS revenue by region, worldwide,

6 6 List of figures Figure 42: Capgemini s TSPS revenue by sub-segment, worldwide, Figure 43: Capgemini s TSPS revenue by region, worldwide, Figure 44: CGI Group s TSPS revenue by sub-segment, worldwide, Figure 45: CGI Group s TSPS revenue by region, worldwide, Figure 46: Cognizant s TSPS revenue by sub-segment, worldwide, Figure 47: Cognizant s TSPS revenue by region, worldwide, Figure 48: CSG International s TSPS revenue by sub-segment, worldwide, Figure 49: CSG International s TSPS revenue by region, worldwide, Figure 50: Dimension Data s TSPS revenue by sub-segment, worldwide, Figure 51: Dimension Data s TSPS revenue by region, worldwide, Figure 52: EMC s TSPS revenue by sub-segment, worldwide, Figure 53: EMC s TSPS revenue by region, worldwide, Figure 54: Ericsson s TSPS revenue by sub-segment, worldwide, Figure 55: Ericsson s TSPS revenue by region, worldwide, Figure 56: Hewlett-Packard s TSPS revenue by sub-segment, worldwide, Figure 57: Hewlett-Packard s TSPS revenue by region, worldwide, Figure 58: Huawei s TSPS revenue by sub-segment, worldwide, Figure 59: Huawei s TSPS revenue by region, worldwide, Figure 60: IBM s TSPS revenue by sub-segment, worldwide, Figure 61: IBM s TSPS revenue by region, worldwide, Figure 62: Infosys TSPS revenue by sub-segment, worldwide, Figure 63: Infosys TSPS revenue by region, worldwide, Figure 64: NEC/NetCracker Technology s TSPS revenue by sub-segment, worldwide, Figure 65: NEC/NetCracker Technology s TSPS revenue by region, worldwide, Figure 66: Neustar s TSPS revenue by sub-segment, worldwide, Figure 67: Neustar s TSPS revenue by region, worldwide, Figure 68: Nokia Networks TSPS revenue by sub-segment, worldwide, Figure 69: Nokia Networks TSPS revenue by region, worldwide, Figure 70: Oracle s TSPS revenue by sub-segment, worldwide, Figure 71: Oracle s TSPS revenue by region, worldwide, Figure 72: SAP s TSPS revenue by sub-segment, worldwide, Figure 73: SAP s TSPS revenue by region, worldwide, Figure 74: Tata Consultancy Services TSPS revenue by sub-segment, worldwide, Figure 75: Tata Consultancy Services TSPS revenue by region, worldwide, Figure 76: Tech Mahindra s TSPS revenue by sub-segment, worldwide, Figure 77: Tech Mahindra s TSPS revenue by region, worldwide, Figure 78: Tieto s TSPS revenue by sub-segment, worldwide, Figure 79: Tieto s TSPS revenue by region, worldwide, Figure 80: Wipro s TSPS revenue by sub-segment, worldwide, Figure 81: Wipro s TSPS revenue by region, worldwide,

7 7 List of figures Figure 82a c: Comparison of telecoms software professional services suppliers by region and service sector Figure 83a c: Mergers and acquisitions in the telecoms software professional services market, August 2007 August 2014 Figure 84: TSPS market shares by supplier type, APAC, Figure 85: TSPS market shares by supplier type, LATAM, Figure 86: TSPS market shares by supplier type, EMEA, Figure 87: TSPS market shares by supplier type, NA, Figure 88: NEPs TSPS market shares by sub-segment, worldwide, Figure 89: ISVs TSPS market shares by sub-segment, worldwide, Figure 90: IT suppliers TSPS market shares by sub-segment, worldwide, Figure 91: Global CSIs TSPS market shares by sub-segment, worldwide, Figure 92: Regional CSIs TSPS market shares by sub-segment, worldwide, Figure 93: TSPS revenue by supplier type and region, worldwide, Figure 94: TSPS revenue by sub-segment and supplier type, worldwide,

8 8 Executive summary Recommendations Market definition Business environment Market shares Vendor analysis Mergers and acquisitions Appendix: Supplementary data About the authors and Analysys Mason

9 9 TSPS revenue is shifting between the different types of services and suppliers, which suggests that it is a very mature market The telecoms software professional services (TSPS) market is fragmented. The top-six suppliers (unchanged since 2011) accounted for 36.5% of the USD53.75 billion market in. Many communications service providers (CSPs) deployed LTE networks and conducted OSS/BSS transformations for analytics and customer experience management (CEM) in. This boosted vendors TSPS revenue because CSPs outsourced TSPS to reduce in-house tasks and costs. CSPs experimented with connected car, m-payment, m- health and cloud-based services, and network virtualisation, in, but this did not significantly increase revenue. Nokia Networks dropped to sixth position because it terminated several unprofitable TSPS deals. Huawei moved up to third position thanks to winning managed services deals abandoned by Alcatel-Lucent and Nokia. Vendors (NEPs, ISVs and IT suppliers) benefited from CSPs using more commercial off-the-shelf solutions (COTS) than systems integration (SI) in transformation projects, which boosted product-related services revenue. NEPs, ISVs, CSIs and IT suppliers have similar TSPS capabilities and all bid for the same CSP contracts, which moves TSPS revenue between suppliers, rather than contributing to TSPS market growth. Figure 1: TSPS market shares by supplier type, worldwide, [Source: Analysys Mason, 2014] CSIs (regional) 8% IT suppliers 10% Year-on-year growth rate: CSIs (global) 26% Figure 2: TSPS market shares by supplier, worldwide, [Source: Analysys Mason, 2014] Ericsson 9.2% Alcatel- Lucent 6.0% Huawei 5.8% IBM 5.4% Other 63.5% ISVs 24% NEPs 32% Amdocs 5.4% Nokia Networks 4.7% Total revenue: USD53.75 billion 3% Total revenue: USD53.75 billion

10 28 Definitions of telecoms software professional service supplier types Figure 10: Definitions of telecoms software professional service supplier types [Source: Analysys Mason, 2014] Supplier type Definition Network equipment provider (NEPs) Independent software vendors (ISVs) IT suppliers Global consulting and systems integrators (CSIs) Regional consulting and systems integrators (CSIs) NEPs are vendors that develop and implement core and access telecoms network equipment, as well as devices such as routers, switches, CPE, MPLS switches, DSLAMs, multiplexers, optical devices, mobile switches and base stations. NEPs also develop telecoms software for all the equipment that they develop. ISVs are vendors that develop telecoms software independent of the network and IT equipment. ISVs focus on providing licences for their software products and additional services, such as maintenance. IT suppliers manufacture IT equipment (such as PCs, laptops, servers, SANs and NASs), and, like ISVs, develop telecoms software independent of network and IT equipment. Global CSIs do not develop any hardware or software for commercial resale, and have a notable presence in all major geographical regions. Pure-play systems integrators (such as Accenture) account for most of the suppliers in this category, but it also includes pure-play consultants (such as KPMG). Regional CSIs do not develop any hardware or software for commercial resale, lack a notable presence in all major geographical regions, and generate less than USD900 million in annual revenue from telecoms software professional services. Such suppliers also tend to charge relatively low prices for their services in the region where they operate.

11 83 Executive summary Recommendations Market definition Business environment Market shares Vendor analysis Mergers and acquisitions Appendix: Supplementary data About the authors and Analysys Mason

12 84 About the authors [1] Shanthi Ravindran (Senior Analyst) Shanthi is a member of Analysys Mason s Telecoms Software research team, focusing on OSS, BSS and SDP for Asia Pacific customers. Shanthi has more than 20 years of experience at Tier 1 infrastructure vendors, working on design, deployment and operations of wireless and broadband networks for operators across the Asia Pacific region, starting with the first GSM and CDMA networks in Malaysia and Singapore, and continuing on through to 3G and 4G networks. She is an expert in designing optimised, end-to-end network solutions and has a strong understanding of the applicable telecoms and network evolution standards. She also has extensive experience in working with many independent software vendors for sourcing and building complete solutions. She joined Analysys Mason in and holds a BSc in Electrical Engineering from University of Kerala (India). Glen Ragoonanan (Principal Analyst) is the lead analyst for Analysys Mason s Infrastructure Solutions, Service Delivery Platforms and Software-Controlled Networking research programmes. He joined Analysys Mason in 2008 and has worked as a consultant on projects on next-generation IT and telecoms networks, systems and technologies for incumbents, new entrants, private companies, regulators and public-sector clients. His primary areas of specialisation include operations and business support systems (OSS/BSS) solution architecture and integration for business process re-engineering, business process optimisation, business continuity planning, procurement and outsourcing operations and strategies. Before joining Analysys Mason, Glen worked for Fujitsu, designing, delivering and managing integrated solutions. Glen is a Chartered Engineer and project management professional with an MSc from Coventry University.

13 85 About the authors [2] Gorkem Yigit (Research Analyst) is part of the Telecoms Software research team, contributing to the Service Assurance, Infrastructure Solutions, Service Delivery Platforms and Customer Experience Management programmes. He started his career in the telecoms industry with a graduate role at a leading telecoms operator, before joining Analysys Mason in late. He has also written an academic paper about market acceptance of cloud enterprise resource planning (ERP) software and he earned a cum laude MSc degree in Economics and Management of Innovation and Technology from Bocconi University (Milan, Italy).

14 86 About Analysys Mason Knowing what s going on is one thing. Understanding how to take advantage of events is quite another. Our ability to understand the complex workings of telecoms, media and technology (TMT) industries and draw practical conclusions, based on the specialist knowledge of our people, is what sets Analysys Mason apart. We deliver our key services via two channels: consulting and research. Consulting Our focus is exclusively on TMT. We support multi-billion dollar investments, advise clients on regulatory matters, provide spectrum valuation and auction support, and advise on operational performance, business planning and strategy. We have developed rigorous methodologies that deliver tangible results for clients around the world. For more information, please visit Research We analyse, track and forecast the different services accessed by consumers and enterprises, as well as the software, infrastructure and technology delivering those services. Research clients benefit from regular and timely intelligence in addition to direct access to our team of expert analysts. Our dedicated Custom Research team undertakes specialised and bespoke projects for clients. For more information, please visit

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16 88 Consulting from Analysys Mason For more than 25 years, our consultants have been bringing the benefits of applied intelligence to enable clients around the world to make the most of their opportunities. Our clients in the telecoms, media and technology (TMT) sectors operate in dynamic markets where change is constant. We help shape their understanding of the future so they can thrive in these demanding conditions. To do that, we have developed rigorous methodologies that deliver real results for clients around the world. Our focus is exclusively on TMT. We advise clients on regulatory matters, help shape spectrum policy and develop spectrum strategy, support multi-billion dollar investments, advise on operational performance and develop new business strategies. Such projects result in a depth of knowledge and a range of expertise that sets us apart. We help clients solve their most pressing problems, enabling them to go farther, faster and achieve their commercial objectives. To find out more, please visit

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