Bigger is better in 2010 comms market
At the end of a year of fierce competion, CRN looks at the winners and losers in the comms market
2010 has been a year for big names and big ideas in the comms channel.
HP and Cisco’s battle for infrastructure supremacy has continued to heat up, with Avaya also developing lofty ambitions on the back of its new-found data portfolio.
In the telecoms world, another big three appear to be emerging in the shape of BT, Opal and Virgin.
But smaller players have certainly made their voices heard, as often as not through aggressive consolidation drives.
As the year draws to a close, we examine which trends have set the market alight, and which may emerge in the year to come
Kevin Kivlochan, sales and marketing director at Cisco Gold partner ONI, claimed his firm had homed in on developing expertise in contact centre and datacentre technologies this year.
Clients’ demands will continue to evolve next year, he said.
“Conversations will become more and more about datacentre and virtualisation,” he said. Kivlochan also claimed his firm’s dedicated focus on Cisco was a key differentiator.
Attempting to be a jack-of-all-trades in today’s market is a folly, he added, and ONI has turned down requests to resell Avaya, Nortel, Mitel and others.
“You cannot be all things to all men,” he said. “Customers are so much better educated than they were five years ago. You cannot add value by Googling something 10 minutes before you go to a meeting.”
Buying and building
The telecoms space has, as ever, been a maelstrom of competition and consolidation this year.
At the lower end of the market, Daisy continues to be the standard bearer for the buy-and-build model, with the Lancashire firm snapping up six targets in 2010.
The last month alone has seen the comms provider spend a combined total of more than £50m on SpiriTel and Network Europe Group.
Daisy chief executive Matthew Riley told CRN the shopping spree would continue for at least another year.
“Our view is to continue consolidating the marketplace; that is what our stated ambition is,” he said.
Riley added that the provision of telephony to doctors’ surgeries – in which NEG specialises – will be a big push for Daisy this year.
“We are going to work that vertical quite hard,” he said.
“We are keeping all the team and want to expand it with some of our people too.”
Daisy has been far from the only telecoms player to chase mergers and acquisitions this year. Serial acquirer Chess snapped up four targets, taking its grand total to 48.
In October, Bluebell Telecom espoused its credentials as the next big thing in telecoms consolidation after buying telephony services firm Callstream.
Lincoln-based GCI Com has quietly built itself into a nigh-on £50m player through buyouts including NetServices and Hive Telecom.
Brendan Lynch, director of wholesale markets at Virgin Media Business, expects the consolidation of the last couple of years to continue.
“It is certainly not a space that is expanding,” he said. “We will see continued consolidation. It is becoming tougher for new entrants and existing players.”
Divisions narrow
This year also saw the big mobile operators becoming much more visible in the traditional comms arena. Operators including O2, Orange and Vodafone have all been linked to possible buyouts of fixed-line players.
John Carter, managing director of distributor DMSL, claimed the divisions between fixed and mobile channels would continue to narrow.
“Most [end users] are looking at mobile – the prices are being slashed to almost compete [with fixed lines],” he said. “The mobile operators all want the customers and will make it more competitive.”
Cloud and mobility are certainly the watchwords within the analyst community when it comes to forecasting the key trends for next year.
In Gartner’s annual list of top predictions for the IT market, it is projected that, within two years, 80 per cent of businesses will support use of tablet devices within their workforce.
Within three years, 90 per cent of firms will support corporate applications on personal devices.
But, whatever the technology in question, Gartner fellow Darryl Plummer claimed cost will still be king next year. “With costs still under pressure, growth opportunities limited and the tolerance to bear risk low, IT faces increased levels of scrutiny from stakeholders,” he said.
IDC, meanwhile, believes mobility, social media and cloud computing will be the pillars the IT space is built around over the coming years. Spending on public cloud services is projected to grow 30 per cent in 2011 – five times the growth rate of overall IT spending.
IDC also forecasts that non-PC mobile devices – including smartphones and tablets – will outsell traditional systems within 18 months. Mobile app downloads will increase 150 per cent to 25 billion next year, said the analyst.
IDC chief analyst Frank Gens said: “These once-emerging technologies can no longer be invested in, or managed, as sandbox efforts around the edges of the market. Instead, they are becoming the market itself and must be addressed accordingly.”