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Systems integrators set to dictate corporate networking procurement
as ICT outsourcing growth in Europe gains momentum

ICT outsourcing market to grow from EUR23.5 billion in 2002
to EUR34.5 billion by 2007 (20% of total EUR174 billion ICT market)

TOs must fight to maintain presence in value chain and ownership of customer



CAMBRIDGE, UK, February 5, 2003 - Europe's telecoms operators face new
competitive pressures from major systems integrators in the lucrative EUR174
billion corporate IT and networking market, according to a new report from
Analysys, the global advisers on telecommunications, IT and media
http://www.analysys.com


"Large corporations looking to implement a wide area networking (WAN)
solution are increasingly working through major systems integrators -
companies such as CSC, EDS and IBM - rather than dealing directly with
telecoms operators," said Ross Pow, co-author of the report. "This is being
fuelled by the growth in the number of comprehensive information and
communication technology (ICT) outsourcing contracts being signed across
Europe."


The report, entitled Competition in Corporate Networking: the challenge from
systems integrators and strategies for operators, states that while the
overall ICT market is flat, European outsourcing revenue has been growing
steadily at over 5% and is set to rise even faster in the next few years.
This trend, say the authors, is shifting power into the hands of major
systems integrators.


Analysys estimates that the Western European ICT outsourcing market was
worth EUR23.5 billion in 2002 (14% of the total corporate networking market)
and that WAN connectivity accounts for around EUR4.4 billion or 19% of this
market. (A chart depicting expenditure on ICT outsourcing in Western Europe
for 2002 is available to journalists on request). The ICT outsourcing market is
forecast to grow to at least EUR34.5 billion by 2007 (nearly 20% of the
corporate networking market).


"Increasingly, these large ICT outsourcing contracts require the systems
integrator to take a prime role in procuring and managing the necessary
national or international WAN connectivity," added Pow. "As a result,
telecoms operators are having to sell to systems integrators rather than
directly to the end customer, with whom they have traditionally enjoyed a
dominant direct relationship. This inevitably affects telecoms operators in
terms of their ownership of the customer, their profit margins and their
ability to sell on IT-related service offerings."


The report concludes that operators must not underestimate the rising power
of systems integrators, and should defend their market position by focusing
on their managed service solutions, using their own systems integration
businesses to cement their corporate customer relationships and building
partnerships with the key players in the ICT outsourcing market.


Written by David Martin and Ross Pow, the report presents an overview of the
corporate ICT outsourcing market, including revenue forecasts and analysis
of the key players. It also includes case studies for a number of leading
systems integrators (EDS, IBM Global Services, LogicaCMG and Siemens
Business Services) and highlights the actions telecoms operators can take to
address this significant change in their marketplace.


The report is available to purchase online at http://research.analysys.com/store
Prices start from EUR1445.
For more information, telephone Analysys on +44 (0)1223 460600 or email research@analysys.com.


About Analysys http://www.analysys.com

Analysys, the global advisers in telecoms, IT and new media, works at the
forefront of the communications revolution, delivering advice and insight to
established and new entrant players. From offices in Cambridge, London,
Glasgow, Madrid, Milan, Paris, San Francisco and Washington DC, Analysys
staff provide strategy and systems consultancy, information services and
start-up support to the companies that are creating the networked economy.
Analysys Research reports and market intelligence services provide
authoritative coverage of this convergent industry, based on an unrivalled
ability to fuse real-world experience, rigorous research and forward-looking
analysis.

Recent reports include:

Business Data Services: growth opportunities and forecasts 2002-2007
(January 2003)

Competition in Corporate Networking: the challenge from systems
integrators and strategies for operators (January 2003)

The Future for Fixed-Mobile Substitution: options for fixed and mobile
operators (December 2002)

Competing in the European Directory Services Market: opportunities in a
liberalising market (December 2002)

Mobile Content and Entertainment: forecasting the market for games and
other wireless content (November 2002)

Strategies for Mobile Device Evolution: meeting and creating market demand
(October 2002)

Western European Mobile Forecasts and Analysis 2002-2007 (September 2002)

Cable TV Market Scenarios to 2007: prospects for cable TV operators in
Germany, the Netherlands and the UK (September 2002)

IP Voice Services: the return on investment for European service providers
(September 2002)

The Future for Telecoms Incumbents: the impact of competition, regulation
and customer demand (July 2002)

Charging and Revenue Sharing for Mobile Content and Entertainment (July 2002)

Enabling Prepaid Mobile Content and Data Services: strategies for
operators and vendors (June 2002)

IP Voice Services: European corporate market forecasts 2002-2007 (May 2002)

Scenarios for the European Telecoms Market 2002-2007: forecasts and
analysis (May 2002)
Benchmarks and Key Performance Indicators: lessons from the European
telecoms market (April 2002)

The Reality of GPRS in Europe: subscribers and revenue (April 2002)

Session Initiation Protocol: SIP-related European revenue forecasts
2002-2007 (February 2002)

Public Wireless LAN Access: US Market Forecasts 2002-2007 (January 2002)

Media contacts (for author photography, executive summaries and interviews)

Louise Nunn

Analysys

Tel: +44 (0)1223 460600

Email: louise.nunn@analysys.com

Martin Brooke

Martin Brooke Associates

Tel: +44 (0)1223 264050

Email: martin.brooke@dial.pipex.com

This press release was distributed by SourceWire News Distribution on behalf of Martin Brooke Associates in the following categories: Business & Finance, Computing & Telecoms, Consumer Technology, Personal Finance. For more information visit http://www.sourcewire.com/about.