CHALLENGES, OPPORTUNITY AHEAD FOR TRADITIONAL INFRASTRUCTURE SYSTEMS VENDORS IN IMS
16 September 2005 - Venture Development Corporation

New VDC research shows traditional infrastructure Systems Vendors will have a dominant role in the early IMS market.

VDC has identified four major supplier groups in the IMS industry today:

Systems Vendors - Vendors who offer complete solutions based on in-house products and/or repackaged products from other vendors.

Systems Integrators - Integration and consulting firms that play a major role in developing Internet applications and integrating them into business processes. This group includes integration divisions of some traditional network equipment providers.

Component Vendors - Vendors who specialize in one to two IMS network components that must be integrated with other vendors' equipment.

3rd-Party Application Developers - Media and entertainment groups, software firms, and individuals who develop niche applications, usually with the support of a larger ecosystem.

VDC's study identifies several scenarios in which each of the above groups could gain a dominant IMS market position.

Of all suppliers, Systems Vendors have the most representation in the many standards bodies and industry groups working on IMS. Furthermore, their large development and engineering budgets gives them a slight head start compared to the other groups. However, other groups are not far behind. Component Vendors, including many Application Server, Media Server, and Session Border Controller companies have made significant traction in their respective focus areas.

Despite their lead, Systems Vendors also face the most challenges of all groups. 'Systems vendors are in a difficult predicament,' says VDC's Telecom Practice director and IMS study author Chad Hart. 'Systems vendors face competition on all fronts, many component vendors have gained prominence with service providers, and in many cases carriers are requiring their Systems Vendors to work with select Component Vendors, even when the Systems Vendors offer their own solution in the area. In addition, System Integrators threaten to erode profession service revenues, leaving less room for these vendors who used to provide all levels of the value chain themselves.

'To make matters worse, it is just a matter of time before Chinese vendors develop low-cost IMS products, potentially commoditizing much of the IMS infrastructure market. In response we see these Systems Vendors aligning themselves with one of four VDC-identified competitive strategies.'

http://www.vdc-corp.com

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