Ovum Projects $66 Billion Market for Four IP-Based Managed Services by 2012

Mon May 19, 2008 5:00pm EDT

* Reuters is not responsible for the content in this press release.

  SAN JOSE, CA, May 19 (MARKET WIRE) -- 
 Cisco (NASDAQ: CSCO) today announced the latest results of a multi-year
market study of the global adoption of managed IT and communication
services. The study, performed by Ovum and commissioned by Cisco as part of
its on-going commitment to enabling service providers, confirmed that businesses
are increasingly looking to managed service providers for managed metro
Ethernet, managed Internet Protocol (IP) Virtual Private Networks (VPNs),
managed
IP voice and managed security. The report notes that the market for these
managed
IP-basedservices continues to see strong growth at a current compound annual
growthrate (CAGR) of 18 percent over the forecast period and is expected to
deliver revenues of US $66 billion by 2012.

    This comprehensive study was based on data collected from more than 1,300
individuals in companies using managed services in 14 countries across the
Americas, Europe, Middle East, Africa and Asia. The companies are in the
finance, manufacturing, retail, government, healthcare and education markets.

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

    Other key findings and conclusions from Ovum's study include the
following:


--  Europe currently leads in the adoption of managed services, but will
    be overtaken by the North American market, which is expected grow to be the
    largest market in the world for managed services by 2012. Asia Pacific is
    projected to have the most rapid growth fueled by managed service adoption
    in India and China, with a CAGR estimated at 27 percent.
--  Customers who have adopted managed services are largely pleased with
    that decision, and they are enjoying lower costs and higher levels of
    support and availability than anticipated.
--  The current global market for managed IP VPN services is the largest
    among the managed services studied at US $17 billion.
--  By 2012, managed IP VPNs will remain the most widely deployed adopted
    service, though IP voice is the fastest-growing managed service with a 39
    percent CAGR for the forecast period.
--  The manufacturing industry remains the vertical industry that uses the
    most managed services, followed by finance and retail. Government fell from
    third to fourth place in managed services adoption since the first report
    was published in February 2006.
--  Thirty-nine percent of the respondents said they would use "Cisco
    Powered" services if offered by their providers, in comparison to a total
    of 8 percent who said they would use services based on solutions from the
    next four most highly ranked networking vendors in the study.
--  Interest from end users in managed service bundles continues to grow,
    with more than 64 percent of respondents indicating that better, more
    intelligent, integrated managed service solutions would further incline
    them to purchase bundles.
    

    
"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. "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."

    Cisco's strategy is to support managed service providers as they envision,
build
and accelerate demand for their network and premise-based managed services that
today's businesses expect. The Cisco Powered Program designates service
providers
who deliver their services using Cisco networking equipment and technology and
have met market-based standards of support defined by Cisco. Through the
Cisco Powered Program, managed service providers have access to industry-leading
solutions, third-party validated designations, training and extensive
go-to-market
support.

    "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 said. "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."

    Hall and Cisco will host a series of live webcasts entitled, "Capture the
Managed Service Opportunity in Your Region" on May 20 and 21. Topics
will
include:


--  Global and regional opportunities for managed services; and
--  Managed IP VPNs, managed metro Ethernet, managed security and managed
    IP communications services trends.
    

    
The results of Ovum's last study of this type were announced in
February2006 and may be found at:
http://newsroom.cisco.com/dlls/2006/prod_021306d.html.

    To learn more about the webcast and to register, click on the following URL:
http://www.ciscowebtools.com/sp/newsletters/05-2008/ovum_ms_webinar.html

    For additional information about managed services and the Cisco Powered
Program,
please visit the Cisco web site at: http://www.cisco.com/go/managedservices.

    About Cisco

    Cisco (NASDAQ: CSCO) is the worldwide leader in networking that transforms
how
people connect, communicate and collaborate. Information about Cisco can be
found at http://www.cisco.com. For ongoing news, please go to
http://newsroom.cisco.com.

    Cisco, Cisco Systems, and the Cisco Systems logo are registered trademarks
or
trademarks of Cisco Systems, Inc. and/or its affiliates in the United States and
certain other countries. All other trademarks mentioned in this document or
Website are the property of their respective owners. The use of the word
partner does not imply a partnership relationship between Cisco and any other
company. This document is Cisco Public Information.

    For direct RSS Feeds of all Cisco news, please visit "News@Cisco" at the
following link: http://newsroom.cisco.com/dlls/rss.html

    

Media Contact:
Kevin Petschow
Cisco
(773) 444-5106
kpetscho@cisco.com

Industry Analyst Contact:
Todd Hanson
Cisco
(408) 853-8255
todhanso@cisco.com

Investor Relations Contact:
Marilyn Mora
Cisco
(408) 527-7452
marilmor@cisco.com

Copyright 2008, Market Wire, All rights reserved.

-0-
Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.