SDP Market Analysis and Forecast

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SDP Market 2009-2012

The Moriana Analyst Report “SDP Market 2009-2012” presents a comprehensive analysis of the Service Delivery Platforms (SDP) business space in terms of market relevance, structure, segmentation, size, and forecast per segment for 2009 to 2012. This report is a valuable source of information for all suppliers of products, solutions and services already competing or planning to enter the various SDP market segments. Investors, VCs, Communications Regulators, Economists, Strategists, CTOs, CMOs and Product Managers from both Service Providers and suppliers will get a good understanding – not just numbers - of the SDP offering scope, the competition characteristics, as well as the opportunities and the future growth of this market.

Analysis of market data from over 60 SDP suppliers and 20 Service Providers

80 pages long, real deployment numbers, 25 tables and charts. market forecasts and analysis.

 

1. Discover what makes a real Service Delivery Platform

2. Examine the evidence on why SDP is a significant market

3. Access data on the level of maturity in different markets

4. Discover how the SDP market will evolve in the next three years

5. Learn how SDP investments will differ and depend on different classes of services

6. Get the facts on the real drivers and inhibitors for these investments

7. Find out who the existing stakeholders are and what their likely future will be

8. Review the range of different business models supported by SDPs

9. Learn about the competitive characteristics of SDP suppliers

10. Review the future of Service Aggregators, Content Providers and SaaS, PaaS and Cloud Computing providers

11. Get access to market data from all representative categories in the SDP market.

12. Get market forecasts on why the SDP market segment will exceed $3 billion in 2012.

Executive Summary

Market Size and Overview

• The Service Delivery Platform (SDP) market has enjoyed substantial growth, from just $0.1 billion in 2002 to nearly $1 billion in 2008. Moriana recent analysis shows that, despite the current global economic downturn, this market segment will steadily grow year-by-year and will exceed $3 billion in 2012.
• Recent market consolidation among SDP solution providers is a strong sign of global SDP market transformation to the next level of maturity. However, this maturity differs in geographical regions and classes of services. Whereas Europe, North America, Japan, Korea, or Australia can be classified as mature SDP markets, the other regions are either in their infancy or in an early maturity phase, creating potential for the growth.

Market Growth

• Several factors that will drive the growth of SDP market in the coming years. Communication Service Providers (CSPs) will require more openness, extendibility and flexibility from service platforms to quickly boost their service delivery capabilities and will be more alert in avoiding vendor lock-ins. This will drive adoption of SDP for new classes of services including VoIP, IMS and NGN rich communications, IPTV, VoD, mobile commerce, mobile banking, mobile payment, mobile advertising, as well as convergent and real-time charging.

Market Outlook

• In the mature markets, the availability of wireless and wireline broadband access will stimulate the proliferation of bandwidth-intensive services such as video and network gaming. In turn, this will drive adoption of SDPs for IPTV and VoD, first as part of service bundles such as Triple and Quad Play, offered in competition by both incumbent CSPs and cable operators.
• However, the most important SDP market growth is expected to be in the emerging markets. The global number of mobile subscribers will increase from 3.3 billion in 2008 to over 5 billion in 2011-2012. This will mainly come from markets such APAC, LATAM and MEA.
• Due to the increasing saturation, Mobile Network Operators (MNOs) in these markets will no longer enjoy rapid revenue growth from expanding subscriber base. They will have to find new ways of increasing ARPU through attractive service bundling, mobile content and advertising and advanced services to their prepaid customer base. Without ignoring what is necessary to build for the specificities of these markets, the SDP adoption rate though could be much faster as these models have been already tested in developed markets and at this time, suppliers are more mature in their offerings.

Emerging markets

• In particular, the rapid growth of mobile subscriber in the emerging markets will increase the global share of prepaid subscriptions from 60% today to 80% in 2012. This in turn will drive the adoption of SDPs for real-time charging, and for value added services, such as mobile payment and mobile advertising based on it. The lack of wireline infrastructure will also drive adoption of mobile broadband in these markets which in turn will allow MNOs to offer multimedia mobile content and Internet services, such as browsing, searching or instant messaging.

Network Convergence

• Ongoing network convergence will stimulate the adoption of SDPs enabling core voice services across legacy and IP networks. They will gradually replace network-specific IN stove pipes. Convergence will also stimulate adoption of SDPs supporting convergent charging and billing for mobile, fixed, broadband, IPTV and other service categories. The traditional distinction between prepaid and postpaid subscribers will be gradually removed. SDP adoption will also be part of the required transformation of the OSS/BSS infrastructure to migrate to broadband services, convergence of lines of business and customer experience oriented management.

New Business Models

• The adoption of new business models to create fresh revenue streams and sustainable competitive strategies, builds the strongest case for SDPs. Today, the Open Garden is evolving from the traditional CSP’s Walled Garden services model. Better understanding of the various business models and classes of services that can be monetized in many ways, will require new SDPs to support them with appropriate components and this is what will drive further developments in the SDP market.

SDP players

• The SDP market as it is today has already attracted all leading Network Equipment Providers, System Integrators and IT infrastructure suppliers as well as numerous Independent Software Vendors and third party content and applications providers, often backed by VCs and other investors.
• Within this market, suppliers face many challenges, too. Some important ones are CSP’s aversion to the risk of change, insufficient knowledge of the business models supported by SDPs and inability to appreciate their real economic value. Suppliers have to work with Service Providers on assuring clear understanding of the transition to these new business models and be able to explain how solution architectures such as SDPs de-risk the transition. These are slow and difficult processes, delaying CSP’s investment decisions.

Conclusions, key findings and recommendations for suppliers and service providers

• See the executive summary in the report

Authors of this report

Lucia Gradinariu

Lucia Gradinariu has twenty years of combined IT and Communication Networks experience, acquired while holding senior technical and management roles with Internet Services Providers and IT vendors, working in Data Center Operations, Client Consulting, Product Development and Business Strategy. She has pioneered multimedia communications over IP and built web conferencing tools in the early 90’s for the largest French Research and Academia network, consulted on strategic customer accounts at Oracle and developed Oracle’s first SDP offering with technology partners, initiating new strategies for competing in the telecommunications sector, and drove CA’s Service Management solutions strategy for Communications, Media and Entertainment industries.With a strong portfolio of business and technology expertise, Lucia created her IT&Telecom consulting practice at LGG Solutions, LLC. She collaborates as analyst and editor with the Moriana Group and contributes as advisor to ICT industry organizations such as TeleManagement Forum and OASIS. She is also a Principal at NextGen Marketing Group focusing on Telecom markets. A frequent speaker, writer and educator on Telecom Services Layer and Enterprise IT topics, she holds an MSc in Electronics and Telecommunications from Technical University of Iasi, Romania and a PhD in Computer Sciences from INSA de Lyon, France.

Kristofer Kimbler

Kristofer has over twenty five years of experience in the telecom and software industry. His domains of expertise include telecom service layer, network intelligence, service delivery platforms and service creation in the areas of mobile networks and NGN/IMS. He was the founder and CEO of Appium - acquired by Aepona in 2007, as well as a number of high-tech start-ups in the telecom space. He is the author and co-author of over 30 papers, books and reports in the area of telecom software and services, and is a member of Technical Program Committee of the ICIN conference series. He has an MsSC in Computer Science, from Warsaw Technical University and Technical Licentiate in Telecom from Lund University, Sweden.

Structure and Organisation

The report is organized into the following sections:

•    Section One - SDP Market Characteristics In this introductory section we try to provide an answer to important questions: what is the scope of SDP market and what makes a ‘real’ SDP? We also analyze SDP market drivers; inhibitors of the SDP market growth; SDP investment patterns and dynamics in operators’ decision processes.

•    Section Two - SDP Market Structure In this section, we define the SDP market scope in terms of market offerings. We provide in-depth analysis of the main SDP market stakeholders and their impact on the SDP market. This includes SDP vendors, Network Operators and Service Providers as well as other stakeholders. The SDP market segmentation based on geographical regions (matured vs. emerging), Service Provider types, and classes of SDP services and applications are also introduced.

•    Section Three - SDP Market Segmentation The categories that define specific needs and characteristics in the SDP adoption are introduced to create a good understanding of SDP market segmentation. Geographical regions, Service Provider type and the classes of SDP services are the main dimensions for segmenting this market and further analyze its realistic size and growth potential.

•    Section Four - SDP Market Size and Forecast In this section, we provide important market data including: the number of SDP deployments per geographical regions and per class of services split by the operator categories (Tier 1-3). We also include typical sizes of SDP contracts per service types and operator categories; Furthermore, we analyze the important factors influencing the SDP market growth and provide an SDP market forecast for 2009 to 2012.

•    Section Five – Competition in the SDP Market In this section, we introduce SDP as a relevant market and analyze the characteristics of competing in this market. The results show the market maturity, the importance of the SDP business for its stakeholders and the intensity of competition among suppliers. A detailed SWAT analysis of different categories of SDP suppliers is presented.

•    Section Six - Business Models Supported by SDPs This Appendix provides detailed analysis of different service providers’ business models that can be supported through SDPs. This includes: open garden, retail, wholesale, SaaS and multi-sided business models.

•    Section Seven - Key Findings and Recommendations In this last section, we summarize the key findings form our analyst research such as: main reasons for the future SDP market growth; the existence of parallel SDP market of Service Aggregators; unexplored potential of business models supported by SDP, and others. We conclude by providing recommendation for the SDP suppliers and to the service providers and operators.

NB: The rate of response from suppliers assured a margin of error of 10% and a confidence level between 90- 95% in the results presented. The accuracy of the results presented in this report has been further validated with other sources of information such as direct interviews, financial reports of public companies surveyed, public data available from other SDP market analyses and previous Moriana surveys with Service Providers. The 2009-2012 forecast for the SDP market was created using Moriana’s own estimative and predictive models, specifically built for this market’s characteristics.

Table of Contents

Executive Summary

ONE: SDP Market Characteristics

• Business drivers for SDP adoption
• Inhibitors for SDP market growth
• Patterns of Investment in SDPs
• SDP Investments Drivers
• SDP Investment Stakeholders

TWO: SDP Market Structure

• SDP Market Scope
• SDP Market Stakeholders
• Vendors of products, solutions and professional services
• Network Operators
• Communication Service Providers who do not own a transport network
• Investors in SDP products and solutions
• End-users of SDP Services

THREE: SDP Market Segmentation

• Geographical Market Segmentation
• Service Provider Type Market Segmentation
• Segmentation by Classes of Services and Applications

FOUR: SDP Market Size and Forecast

• Commercial Adoption of SDPs
• Deployments per Geography and per operator size
• Deployments per Class of Service and operator size
• Average sizes of SDP deals and required investment per subscriber
• SDP Market for 2009-2012
• Market Evolution
• Factors influencing the growth of the SDP market
• 2009-2012 SDP Market Forecast

FIVE: Analysis of Competition in the SDP Market

• Significance of SDP market for the undertakers
• SDP Market Maturity
• Intensity of competition
• Suppliers means to compete
• SWOT analysis for SDP suppliers
• Network Equipment Providers
• System Integrators
• IT suppliers
• Independent Software Vendors
• Applications Providers
• Service Aggregators and SaaS/PaaS Providers

SIX: Key findings and Recommendations

• Key findings from the analyst research
• Recommendations for Suppliers
• Recommendations for Service Providers
• List of vendors

List of vendors surveyed for this report

Independent Software Vendors

• Aepona
• Amdocs
• AppTrigger
• Argela
• Artilium
• Atos-Origin
• ByteMobile
• Comverse
• CoreMedia
• Jinny
• jNetX
• Kabira
• Materna
• MobileAware
• Mobile Cohesion
• Mobixell
• Motricity
• OpenCloud
• Openet
• Personeta
• RedKnee
• SmartTrust
• Sylantro
• Telenity
• Telcordia
• Unipier

Application Providers

• Air2Web
• Almira Labs
• Gintel
• TAZZ Networks
• CA Wily Technologies

Service Aggregators

• JamCracker
• Jamba

Network Equipment Providers

• Alcatel-Lucent
• Cisco
• Ericsson
• Huawei
• Motorola
• NEC
• Nokia Siemens Networks
• Nortel
• Sitronics
• ZTE

IT Vendors

• HP
• IBM
• Microsoft
• Oracle
• Sun Microsystems

System Integrators

• Accenture
• Atos-Origin
• Cadence
• CapGemini
• Computaris
• Comtel Integrators Africa
• Kapsch
• LogicaCMG
• Orga Systems
• SoftLine
• TechMahindra
• TelecomaxVAS
• TietoEnator
• Vishwak Solutions
• Wipro