Week in research: Service delivery platforms on the rise; begun, the PON price wars have

SDP is the watchword for enterprises, SMBs: By 2016, the service delivery platform (SDP) market will reach $24 billion as providers deploy consumer application systems, particularly for mobile devices, according to a new Infonetics Research report. And interest is growing in targeting enterprises and small to medium businesses (SMBs) with SDP applications in developed regions. "B2B offerings like enterprise app stores and vertical-specific applications, including fleet management and telemedicine, hold greater promise for ROI than consumer apps and, possibly more important, these are areas where the operators have an advantage over consumer app powerhouses Apple (Nasdaq: AAPL) and Google (Nasdaq: GOOG), at least in the short term," said Shira Levine, Infonetics Research directing analyst for next gen OSS and policy. News release

Infonetics service delivery platforms 2016

Data center virtualization boosts ADC market: The application delivery controller (ADC) market will surpass $2 billion by 2015, the Dell'Oro Group forecasts, thanks to the growth of data center virtualization and the need for virtualization appliances. Citrix (Nasdaq: CTXS), F5 (Nasdaq: FFIV) and Riverbed (Nasdaq: RVBD) lead the ADC market currently. "Virtual appliances can quickly be deployed in production networks as unexpected or unplanned needs arise, such as supplementing existing hardware with a virtual appliance for peak load or surge situations," said Casey Quillin, senior analyst of Data Center Appliance Market Research at Dell'Oro Group. "Also, most virtual appliances offer a pay-as-you-grow model and don't require a large upfront investment, such as a high end piece of hardware that is only half utilized. This favorable pricing model opens the door to smaller projects, thereby expanding the total available market." News release

Balance of DSL to fiber begins to shift: The ongoing transition in the fixed access technologies and products realm led to mixed results for FTTx, DSL and CMTS (cable modem termination system) markets, Ovum reported this week. Overall, a global shift from DSL networks to FTTH/FTTB (fiber to the home/business) is beginning to accelerate, resulting in an increase in shipments of PON (passive optical network) equipment including ONT (optical network terminals) and ONU (optical network units) as well as VDSL2 ports--which saw a record 6.4 million shipments--during Q2 2012. Asia Pacific, with China in particular, led PON ONT/ONU sales. PON OLT (optical line terminal) shipments declined year-over-year for the first time in three years. "The conversation in fixed access tends to be around shipment volumes, but the focus should really be on revenues and profits," said Kamalini Ganguly, analyst, Network Infrastructure Practice for Ovum. "The PON price wars in China and elsewhere are not sustainable. Revenues are not keeping pace with growth in volumes. Vendors--even Huawei--are being pickier about projects and markets. If price pressures continue, there may be more vendor consolidation like that of Calix's (NYSE: CALX) acquisition of Ericsson's (Nasdaq: ERIC) PON portfolio." Article

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