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October 27, 2008

IDC: Network Equipment Provider Megamergers Driving Growth for ATCA

By Mae Kowalke, TMCnet Contributor

Many telecom equipment vendors and systems integrators are now turning to products made using a relatively new technology specification, Advanced Telecommunications Computer Architecture (ATCA). ATCA, the successor to the CompactPCI computing form factor, is used for the creation of communications system components that can be reused for a variety of applications.
Because of its flexibility, ATCA — and its smaller form factor sibling, microTCA — is benefiting vendors and integrators by enabling telecom-grade solutions that work in a multi-vendor environment and reduce the cost and complexity of deploying communications systems.
In a report released Monday, IDC (News - Alert) said future growth of ATCA adoption will be driven in large part by “megamergers” of large telecom equipment manufacturers like Nokia-Siemens and Alcatel-Lucent (News - Alert).
Lee Doyle, an analyst at IDC, said in the report that such mergers will have the most significant impact on the market for ATCA and its variants (referred to by IDC as “xTCA”). The full impact won’t be felt right away, the report went on to say, because large companies merging in this way are likely to put things on hold temporarily while they develop market strategies.
Once those strategies are sorted out, though, IDC sees demand picking up again for ATCA.
“These megamergers, which account for approximately 25 percent of overall telecommunications equipment revenues, will create increased xTCA demand as the logic of standard platforms takes hold,” IDC said in the report.
IDC reached its conclusions after performing an in-depth look at the scope, attitudes and timing associated with adoption of ATCA and commercial off-the-shelf (COTS) platforms by network equipment providers (NEPs).
During the next five years, IDC forecasted, the xTCA market will grow significantly, reaching a value of $2.65 billion by 2013.
IDC cautioned that, while the growth will increase overall, fluctuations will occur as the effects of megamergers sort themselves out. Also, rates of adoption for COTS components, including those built using ATCA, will vary by company, of course. The changing landscape of the NEP industry will also shift demand around somewhat; for example, although HP has exited the ATCA market, IBM (News - Alert) is stepping in to fill the gap by heavily marketing its BladeCenter products.
Ultimately, ATCA will win out because it offers the benefits of standardization.
“Increased business volumes will necessitate the move toward standardization, and ATCA will be that standard,” Doyle said in the report.
To learn more about the xTCA market, please visit the ATCA channel on, brought to you by RadiSys.

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Mae Kowalke is senior editor for TMCnet, covering VoIP, CRM, call center and wireless technologies. To read more of Mae's articles, please visit her columnist page. She also blogs for TMCnet here.

Edited by Mae Kowalke

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