Frost: Private Enterprises Aid Growth of LAN/WAN Test Equipment Market
August 16, 2007 // Published as a news service by IHS
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Private enterprises appear poised for significant growth in the local area network (LAN) and wide area network (WAN) test equipment market, after previously ranking as the second largest end-user segment in 2006.
Recent analysis from Frost & Sullivan of the LAN/WAN test equipment markets found earned revenues of $815.2 million in 2006, with estimates to reach approximately $1.4 billion in 2013.
"The growth of private enterprises is expected to remain high and generate large revenues, especially through large private enterprises and government organizations," said Frost & Sullivan senior research analyst Sujan Sami.
"With large enterprises deploying LAN/WAN in their premises, the need for the performance analysis of the networks has been on the rise and this is expected to increase the revenues of this market segment."
Quality of service (QoS) has become more important in such large organizations. Analysts said enterprises will likely depend on a number of providers, such as national carriers, equipment vendors, system integrators and global service providers for effective, as well as high quality, performance.
Analysts said online trading, e-commerce and triple play all augment the private enterprises' environment. As a result, the need for IT networks and the importance to test these networks has become critical. Security issues, such as leakage losses and breaching, necessitate the use of test equipment that can cope with emerging technologies.
The introduction of newer technologies, such as 10 gigabit Ethernet in the LAN/WAN test equipment market, also influences growth. Analysts said test vendors now focus on higher range gigabits, as the market has already experienced 40 gig deployments. In addition to voice and video services, specific deployments for data transfer technologies also enhance market growth.
Vendors face difficulties in educating their technicians, as well as their customers, due to the emergence of new technologies at a regular pace coupled with the limited availability of engineers. Analysts said keeping abreast of new technologies and anticipating their emergence will ultimately facilitate vendors' efforts to reach their target customers more efficiently.
The Asia-Pacific region holds potential for growth in the future. Analysts said despite generating lower revenues due to the dollar value, this region contributed greatly toward the growth of the LAN/WAN test equipment market in 2006.
"Many tier one market participants have quickly recognized the value of China, India and Singapore and are directing their efforts toward setting up branches or selling their test equipments through indirect sales," said Sami. "In addition, the number of local and regional vendors has increased since 2002 and this is likely to continue till 2013."
Source: Frost & Sullivan.