Worldwide network product support spending will approach $6.5 billion in 1999, according to IDC

Worldwide spending for network product support will jump by more than a billion dollars in 1999 and close in on the $6.5 billion mark. By 2003, vendors that provide these services will collectively make almost $8.8 billion. Revenues in some segments of the market will decline, however, warns market research firm International Data Corporation (IDC).

"A great disparity continues to exist in the networking products support market," said Richard Dean, senior analyst with IDC`s Network Support and Integration Services research program. "Depending on the specific product segment, the market could be experiencing double-digit growth or a steady decline."

According to IDC, the hot markets in terms of technology are gateways, remote access concentrators, and private WAN switches. Revenues in the overall market will increase at a 1998-2003 compound annual growth rate (CAGR) of 10%, compared with 62%, 32%, and 30% CAGRs, respectively, for these three technologies.

"The growth in the remote access space has been fueled by the increase in branch and home offices connected to corporate LANs, the growth of corporate Internet connectivity, and the purchase of access equipment by global telecommunications carriers and Internet service providers," Dean said.

Declining technology areas for network product support services will include network interface cards, multiplexers, communications processors, and channel extenders.

In terms of activity, the fastest-growing areas will be electronic support and remote diagnostics, which will earn CAGRs of 25% and 22%, respectively.

"Today, vendors typically view electronic support as a competitive differentiator, not as a separate revenue-generating instrument," Dean said. "In the future, however, real-time videoconferencing, advanced remote diagnostics, and other technological advances could expand the capabilities of electronic support delivery, and customers may someday be given the option to purchase Internet-only or electronic-only support contracts."

Although the United States will remain the largest market for network product support services throughout IDC`s forecast, it will grow slower than any other region. The area IDC classifies as the rest of world, which includes the Middle East and Eastern Europe, will grow the fastest.

IDC recently published Network Product Support Services Worldwide Market and Trends, 1996-2003 (IDC #B20290). This report examines the U.S. and worldwide services and support markets for network product technologies. The report forecasts network product support services spending by technology, region, and activity through 2003. For each of the technology categories, the report provides insights into the growing demand for network product support skills and expertise. The report concludes with recommendations for vendors on how to succeed in the market.

For more information or to order the report, please call Cheryl Toffel at 1-800-343-4952 extension 4389 or at ctoffel@idc.com