Operators are seeing enterprise revenue growth, stemming from their investments in fiber-based connectivity, according to Technology Business Research.
TBR’s latest Enterprise Operator Benchmark data shows that for the first quarter of 2017 the highest growth rate of enterprise revenue came from what it calls “strategic data.” TBR analyst Chris Antlitz said strategic data refers to access services such as Ethernet, VPN, and traditional broadband. There is a shift from legacy technologies such as copper-based DSL to next-gen fiber-based platforms, he said. This shift drove a 6.6 percent year-over-year increase in the strategic data segment of enterprise services.
Software-defined wide area networking (SD-WAN) also drove some enterprise revenue growth for service providers during the first quarter, “but not as much as you would think,” said Antlitz. “The actual money they’re getting is very small compared to their traditional services.”
Antlitz noted that service providers are in the midst of network transformation. But during the process, SD-WAN is disrupting traditional MPLS revenue streams.
TBR analyst Steve Vachon said, “Offering software-mediated network services is becoming a necessity for enterprise operators to maintain market share, as most benchmarked companies have either commercially launched or announced plans to offer SD-WAN services.”
According to the TBR data, IT services remained the largest enterprise segment in the first quarter of 2017 with combined revenue among benchmarked companies rising 4.7 percent year-to-year to $12.5 billion due to growth in IoT, cloud, and security.
TBR’s chart makes it look like NTT’s enterprise revenues grew fantastically. But the analysts said this was largely due to inorganic growth from NTT’s acquisition of Dell Services, which closed in the quarter.
Verizon recently sold its cloud and managed hosting services to IBM. The deal with IBM brought to an end Verizon’s efforts to make a true run at the public cloud space against leaders Amazon Web Services and Microsoft.
AT&T, likewise, has moved away from cloud services. In May, it made arrangements with Oracle to move thousands of its internal databases to the Oracle Cloud Infrastructure-as-a-Service (IaaS) and the Platform-as-a-Service (PaaS). The move will provide AT&T enterprise customers with access to those assets via Oracle’s public cloud platform and via AT&T’s its own Integrated Cloud.
The TBR report said, “Carriers including BT, CenturyLink, and AT&T are becoming more willing to play a supportive role to pure plays such as Amazon Web Services, concentrating on augmenting broader hybrid IT environments by providing network connectivity, security, and orchestration platforms instead of serving as the IaaS provider.”