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

LONDON, UK, 21 May 2010 – The network management systems (NMS) market generated USD4.277 billion (EUR3.067 billion) in revenue in 2009, down by 8% from USD4.646 billion (EUR3.158 billion) in 2008, according to NEMs network management systems market share report 2009, from global telecom adviser Analysys Mason (www.analysysmason.com).

Glen Ragoonanan, Senior Analyst, responsible for Analysys Mason’s Infrastructure Solutions research programme 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 cost

· 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.

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

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.

According to the Analysys Mason report, there was a silver lining.

“The impact of increasing mobile data was reflected in spending on mobile backhaul and transport capacity and associated NMS. Also, legacy spending continues to shift towards IP, supporting convergence in both backbone and access networks,” says Ragoonanan. “This was reflected in the marginal year-on-year growth in the business services NMS market segment.”

For more details of the NEMs network management systems market share report 2009, please visit http://www.analysysmason.com/Research/Content/Reports/RMA07_NEMs_NMS_market_share_Apr2010/.