Research Report ICT services for SMEs in Western Europe: forecasts and analysis 2013 March 2013 Patrick Rusby
2 Contents Slide no. 5. Executive summary 6. Executive summary 7. Fixed voice revenue continues to decline 8. Leased lines are gradually being replaced by Ethernet, because SMEs prefer the simplicity of an all-ethernet network 9. Mobile broadband is driving mobile data revenue growth 10. Cloud services revenue will increase rapidly 11. ICT services included in this forecast report and breakdown of enterprise data [1] 12. ICT services included in this forecast report and breakdown of enterprise data [2] 13. Recommendations 14. Recommendations for vendors and operators 15. Western Europe forecasts 16. Significant changes since our previous forecast [1] 17. Significant changes since our previous forecast [2] 18. SME ICT revenue in Western Europe is increasing 19. Revenue per enterprise: Western Europe 20. Mobile data revenue growth fuels growth in mobile voice and data revenue 21. Fixed-line voice revenue is declining 22. Fixed broadband revenue is declining Slide no. 23. Video services revenue will increase but remain relatively low 24. Cloud services revenue is key growth area for SME ICT 25. Drivers of cloud services revenue growth 26. Individual country forecasts 27. This report provides forecasts for fixed and mobile telecoms services in four individual countries 28. Total revenue by category and size of enterprise: France 29. Revenue per enterprise: France 30. Total revenue by category and size of enterprise: Germany 31. Revenue per enterprise: Germany 32. Total revenue by category and size of enterprise: Sweden 33. Revenue per enterprise: Sweden 34. Total revenue by category and size of enterprise: UK 35. Revenue per enterprise: UK 36. Methodology 37. Methodology 38. About the author and Analysys Mason 39. About the author 40. About Analysys Mason 41. Research from Analysys Mason 42. Consulting from Analysys Mason
3 List of figures [1] Figure 1: Fixed voice revenue by size of enterprise, Western Europe, 2013 Figure 2: Dedicated Internet connections by type, Western Europe, 2013 Figure 3: Mobile data revenue by type, Western Europe, 2013 Figure 4: Cloud services revenue by size of enterprise, Western Europe, 2013 Figure 5: Enterprises and employees by enterprise size, Western Europe, 2013 Figure 6: Enterprise sizes, countries and ICT services included in this forecast Figure 7: SME ICT services revenue by category, Western Europe, 2013 Figure 8: Revenue per enterprise per month, by category, Western Europe, Figure 9: Revenue per enterprise per month by category, Germany, 2013 and Figure 10: Mobile voice and data revenue and CAGR by sub-category, Western Europe, 2013 and Figure 11: SME mobile voice and data revenue by sub-category, Western Europe, 2013 Figure 12: Fixed-line voice revenue and CAGR by sub-category, Western Europe, 2013 and Figure 13: SME fixed-line voice revenue by sub-category, Western Europe, 2013 Figure 14: Fixed broadband revenue and CAGR by sub-category, Western Europe, 2013 and Figure 15: SME fixed-line voice fixed broadband revenue by sub-category, Western Europe, 2013 Figure 16: Video services revenue and CAGR by SME size, Western Europe, 2013 and Figure 17: SME video services revenue by sub-category, Western Europe, 2013 Figure 18: Cloud services revenue and CAGR by sub-category: Western Europe 2013 and Figure 19: Cloud services revenue by sub-category, Western Europe, 2013 Figure 20: Countries covered individually in this report Figure 21: SME ICT service revenue, by category, France, 2013 Figure 22: Share of SME ICT service revenue, by size of enterprise, France, 2013 Figure 23: Revenue per enterprise per month, by category, France, Figure 24: Revenue per enterprise per month, by category, France, 2013 and
4 List of figures [2] Figure 25: SME ICT service revenue, by category, Germany, 2013 Figure 26: SME ICT service revenue, by size of enterprise, Germany, 2013 Figure 27: Revenue per enterprise per month, by category, Germany, Figure 28: Revenue per enterprise per month, by category, Germany, 2013 and Figure 29: SME ICT service revenue, by category, Sweden, 2013 Figure 30: SME ICT service revenue, by size of enterprise, Sweden, 2013 Figure 31: Revenue per enterprise per month, by category, Sweden, Figure 32: Revenue per enterprise per month, by category, Sweden, 2013 and Figure 33: SME ICT service revenue, by category, UK, 2013 Figure 34: SME ICT service revenue, by size of enterprise, UK 2013 Figure 35: Revenue per enterprise per month, by category, UK, Figure 36: Revenue per enterprise per month, by category, UK, 2013 and Figure 37: Methodology used to build the data annex to this report
Revenue (EUR billion) ICT services for SMEs in Western Europe: forecasts and analysis 2013 10 Cloud services revenue will increase rapidly Cloud services revenue will increase rapidly from EUR1.2 billion to EUR2.9 billion between 2013 and at a CAGR of 19.7%. Revenue will increase fastest for micro businesses, at a CAGR of 29.2%, as adoption of cloud services increases, accounting for 24.4% of total cloud services revenue in. Cloud services are becoming more proven in terms of security and reliability, and demonstrating tangible benefits to small enterprises particularly as smartphone and tablet adoption increases and mobile data connectivity improves. Small office/home office (SOHO) organisations may find that improving the speed and reliability of residential broadband will enable the adoption of cloud services. ARPU will increase during the forecast period for some services, such as cloud storage and backup and unified communications (UC). Cloud storage and backup is charged per unit of storage used rather than simply per user, and firms generate more data over time, which requires more storage. UC solutions will gradually become more complex and include more services, so ARPU will increase. ARPU will decline for other services such as mobile device management and remote desktop management as they become more-established technologies and more competition enters the market. Figure 4: Cloud services revenue by size of enterprise, Western Europe, 2013 [Source: Analysys Mason, 2013] 3.5 3.0 2.5 2.0 1.5 1.0 0.5 0.0 2013 2014 2015 2016 2017 Medium (50 249 employees) Small (10 49 employees) Micro (0 9 employees)
19 Revenue per enterprise: Western Europe Figure 8: Revenue per enterprise per month, by category, Western Europe, [Source: Analysys Mason, 2013] Figure 9: Revenue per enterprise per month by category, Germany, 2013 and [Source: Analysys Mason, 2013] Service 1% 17% 31% 8% EUR203 per enterprise per month 43% Revenue per enterprise per month (EUR), 2013 Mobile voice and data 87.7 86.6 Fixed voice 71.6 63.2 Fixed broadband 37.2 35.1 Pay TV 1.8 3.0 Cloud services 6.5 15.5 Mobile voice and data Fixed voice Fixed broadband Pay TV Cloud services Revenue per enterprise per month (EUR), ICT revenue per SME in Western Europe will be EUR203 per month in, a decrease from EUR205 per month in 2013. Mobile voice and data will account for the greatest share of this revenue, at 43%. Fixed voice will make up the next greatest share (31%), followed by fixed broadband (17%), cloud services (8%) and pay TV (1%). Cloud services will be the fastest-growing category, with revenue increasing from EUR6.5 per enterprise per month in 2013 to EUR15.5 per enterprise per month in at a CAGR of 19.1%. This will occur as adoption of cloud services increases rapidly during the next five years. Fixed-line voice services revenue will decrease, from EUR71.6 per enterprise per month to EUR63.2 per enterprise per month at a CAGR of 2.5%. This will be driven by declining ARPU and, in micro businesses, an element of fixed mobile substitution, mirroring the trend seen in consumer customers. Mobile voice and data revenue per enterprise per month will decrease from EUR87.7 to EUR86.6 as ARPU declines because of competition. Fixed broadband revenue per enterprise per month will decrease as ARPU for all fixed broadband services decreases and SMEs move from leased lines to Ethernet, which has a lower ARPU.
39 About the author Patrick Rusby (Research Analyst) contributes research for the SME Strategies and Enterprise research programmes. Patrick has specialised in working with and for SMEs, focusing on segmentation strategies, sales channels and SME decision-making processes. Patrick was previously a Research Manager for Knowledge Peers, where he ran a programme of research aimed at informing senior-level SME employees of best practices within finance, technology and telecoms. Patrick has recently published articles on mobile device management services for SMEs, cloud-based unified communications and business challenges for SMEs. He holds a Master s degree in Contemporary British Politics from Goldsmiths College, University of London.
40 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 www.analysysmason.com/consulting. 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 www.analysysmason.com/research.
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