Page 37 - FY18 Advanced Services Strategic Plan

Global Service Provider market profile

Total Addressable Market Market Opportunities
• Short-term opportunities in core, edge, mobility, optical and sell through
+2.2% • Heavy spend on infrastructure transformation in the next 6–12 months -
16,292 followed by significant SDN/NFV and new business model development
15,970 • This will meaningfully disrupt the Telecom Infrastructure Services (TIS)
15,603 market, causing product-attached services spend to decline and professional
15,275
14,975 15,133 services to grow
14,621 • SW/HW disaggregation will drive need for HW differentiation, software-centric
14,185 business solutions, and automation
• Mobility moves to 5G in 12-18 months
FY2014 FY2015 FY2016 FY2017 FY2018 FY2019 FY2020 FY2021 • Increase in virtualized environments requires greater levels of security

Competitive Landscape Market Risk
Tier 1 Suppliers: Services Competition is fierce with Huawei leading the way • SP consolidation and organizational changes leads to slower decision-making
• Huawei challenged with making the transition to a proactive, services-led, and delayed buying
software-centric firm. Focus on diversifying portfolio with more emphasis on • Need to “invest” and take down less profitable deals in the near term to
Cloud, Software and Services. protect market share
• Ericsson’s TIS revenue declined 5% year-to-year (USD) driven by lower volume in • Increased Cisco competition for first mover advantage – renewal
deployment, maintenance and managed services. Most exposed to the downturn
in the RAN market. pricing pressure
• Nokia’s acquisition of Alcatel-Lucent drove inorganic growth in all TIS segments, • Growth in Emerging areas / accounts (STC, RIL) – low margin, high invest
but organic growth continued to decline. • Challenging regulations / political environments
Tier 2 Suppliers
• Atos, Tier 2 growth leader as a result of its acquisition of Unify and continued
contribution from Xerox’s ITO business.
• Tech Mahindra is in a sweet spot as a provider of digital transformation services,
which will grow in demand as operators evolve into digital service providers.

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