Cisco announced the release of a custom-made report analysis that was performed by Ovum (News - Alert). The report forecasts that managed IP-based services — managed metro Ethernet, virtual private network (VPN), voice and security services — will be worth $66 billion by 2012.

 

The report included results from a multi-year market study of the ‘global adoption of managed IT and communication services,’ conducted as part of Cisco’ (News - Alert) continued commitment to enable service providers.

 

Cisco is a networking company that aims to transform how people connect, communicate and collaborate.

 

According to the Ovum study, with businesses increasingly relying on managed service providers for managed metro Ethernet, managed Internet Protocol (IP) VPNs, managed IP voice and managed security. Strong growth for these services is expected, with projected compounded annual growth rate (CAGR) of 18 percent during the forecast period. As noted earlier, the managed IP-based services market is expected to deliver revenues of $66 billion by 2012.

 

"CIOs and IT directors are increasingly looking to service providers and managed service specialists for deployment and management of their networks to reduce costs and improve efficiency," said Peter Hall, Ovum's research director, in a statement. "This result in significant opportunities for those able to meet those needs, especially in the areas of managed voice and security."

 

Ovum conducted a comprehensive study that was based on data collected from approximately 1,300 individuals that were using managed services, from companies in the field of finance, manufacturing, retail, government, healthcare and education markets, across 14 countries.

 

The comprehensive custom-made report was a strategy initiated by Cisco in order to support managed service providers as they visualize, build and accelerate demand for their network and premise-based managed services, according to present day requirements of the businesses. 

 

According to the Ovum report, Europe currently leads in the adoption of managed services. The North American market is expected grow as topper by overtaking the European market by 2012. Asia Pacific mainly India and China is anticipated to have highest adoption in managed service with a CAGR estimated at 27 percent.

 

The study also shows that the current global market for managed IP VPN services is said to be the largest among the managed services, studied at $17 billion and by 2012 they will remain the most widely deployed adopted service. IP voice is also said to be the fastest-growing managed service with a 39 percent CAGR for the forecast period.

 

Another key findings of the Ovum study shows that the manufacturing industry uses the    most managed services, followed by finance, retail and Government. With 39 percent of respondents would like to use "Cisco Powered" services, if offered by their providers. Only 8 percent of respondents said they would use services based on solutions from the    next four most highly ranked networking vendors.

 

The report also depicts that customers are pleased with their decision to adopt managed services and are now able to enjoy lower costs and higher levels of support and availability, than expected. With 64 percent of respondents indicated that they would purchase more service bundles if provided with much better and more intelligent integrated managed service solutions.

 

"As IT and networks become ever more critical to business success, customers recognize the importance of uptime, security and performance in supporting critical applications," said Al Safarikas, senior director of marketing at Cisco, in a statement. "The worldwide growth in managed services indicated by this study shows that businesses are recognizing that these can be successfully delivered by a managed service provider."

 

"Greater end-user awareness of the availability of relevant services, combined with a competitive provider environment, is creating the necessary conditions for rapid market growth in this area," Safarikas continued. "More companies in every geography understand the business case for adopting managed services; they can significantly reduce total cost of ownership while increasing the quality of service. The latter is an important driver, especially in developing markets where due to IT skills shortages, and managed services may be the only way to achieve satisfactory quality of service and service-level agreements."

 

The Cisco Powered Program assigns service providers who deliver their services by making use of the company ‘networking equipment and technology and have also met market-based standards of support that is defined by Cisco.

 

With the help of Cisco’ Powered Program, managed service providers are able to access industry-leading solutions, third-party validated designations, training and extensive go-to-market support.