According to Frost & Sullivan’s (News - Alert) definition, the network performance management (NPM) market consists of solutions to manage, monitor, resolve faults and control changes on the network infrastructure. These solutions are designed to track network traffic gathering information for the needs of statistics collection as well as measuring and optimizing performance for network elements. This market includes IT operations analytics products and network performance management solutions. The IT operations analytics products include traffic monitoring, reporting and analysis, high volume packet capture, storage and analysis, voice over Internet Protocol (VoIP) and video quality monitoring. The network performance management solutions include both software and appliance-based solutions used primarily by enterprises and these include database transaction monitoring, as well as network performance management or monitoring focused on network measurements, performance and volume. 

Market Overview

The total global network performance management market for enterprises reached $2,047.5 million in revenue in 2012. Frost & Sullivan believes that the market will continue to experience a healthy growth within this segment over the next few years.

Global Network Performance Management Market: Revenue, 2012 and 2014

Note: All figures are rounded. The base year is 2012. Source (News - Alert): Frost & Sullivan analysis

Overall, the bulk of sales and favorable opportunities in the market continue to come from North America that currently accounts for 56.0 percent of the overall market revenue in 2012. As such, North America remains the most important region for the NPM market, however, markets like that of Europe also remains strong in terms of revenue growth, despite budgetary pressures caused by the economic downturn in the region.  In addition, the Asia Pacific region shows tremendous opportunities in IT, even though the region is still in a development stage and behind the learning curve in terms of integrated NPM and application performance management (APM (News - Alert)) solutions.

The need of a holistic and unified solution increases market growth

Frost & Sullivan foresees a shift from monitoring individual elements to a much more unified approach to understand the user experience more effectively. In today’s dynamic NPM environment, separately analyzing the network from the application, storage, database and virtual infrastructure is a fault. Customers require a fully unified solution that delivers a single source of truth on business transaction performance. Many vendors claim to deliver full-featured, integrated solutions, but the reality is that customers often are forced to deploy multiple domain tools that are loosely integrated, lack a single view of transaction performance and require costly IT resources to implement and manage.

Companies are in many ways redefining networks and simple applications into a more unified approach centered on service delivery. Companies, such as NetScout (News - Alert), are taking into consideration providing applications and network performance in a holistic view and more value to manage performance and user experience.

In such a scenario, companies that are able to offer differentiated, unified and network performance management solutions with a comprehensive view to simplify management of complex infrastructures enjoy a better position to sustain and grow in this competitive market as they the optimize end-user experience. This shapes the future in a very significant way and gives companies the opportunity for continuous innovation, idea generation and delivering the scale and performance needed for extremely large environments.  

Other key factors expected to positively impact demand in the forecast period between 2013 and 2017 include hybrid-cloud infrastructures, comprehensive customer services experience monitoring, as well as increasing network storage requirements and explosion of data.

On the other hand, some of the key factors restraining market demand are related to IT organizational boundaries. In some organizations, there are barriers between the application support and network support teams that can make it difficult for customers to gain maximum value from a unified application and network performance management solution. There is a lot of fragmentation around the NPM market. In IT organizations,  the network team, the application team, the security team, VoIP team, video team are still providing different and stand alone tools. There is a need to look at service with a more unified service delivery environment approach and a lot of cooperation needed in order to move forward. Also, there is an increasing requirement for a new operational infrastructure to remove several stand alone tools and organize IT teams around a unified application and network performance management solution.

Conclusion

There are several companies in the NPM market that compete based on standalone tools, instead of providing a large and comprehensive customer solution. Frost & Sullivan foresees an increasing necessity for a single solution and more comprehensive monitoring. The next generation NPM solution will combine APM, business transaction management, end-user experience management, as well as NPM and cloud application monitoring in a single solution. There is a growing business in the NPM market focused on providing a one box solution bringing together integration into data sources and mainframe.  Additionally, customer experience is becoming a top priority for many companies focusing on delivery of services based on comprehensive customer experience monitoring and not networks and applications. This is completely changing the landscape of the market.

For more information on Frost & Sullivan’s Test & Measurement research, please contact Jeannette Garcia at [email protected] or 210.477.8427.