Technology, Solutions & Spending

Top of Mind

Technology, Solutions & Spending

By Paula Bernier, Executive Editor, TMC  |  October 01, 2011

This article originally appeared in the Oct. 2011 issue of INTERNET TELEPHONY

Communications technology is pervading virtually every aspect of our lives. That said, investment in such technology continues to grow despite our lagging economy.

According to new data from the Consumer Electronics Association (News - Alert), the average U.S. household spent $1,179 on consumer electronics products in the past 12 months. Indeed, my own household contributed more than its fair share to make that happen, having purchased an iPad at the onset of the summer, and a new desktop computer just as school was starting.

And the consumer electronics industry is estimated to surpass $190 billion in overall shipment revenues this year, a growth rate of 5.6 percent, which is higher than the previous projection from January. The U.S. Consumer Electronics Sales and Forecast , published in July 2011, also projects consumer electronics shipments will grow in 2012, reaching an all-time high of $197 billion.

Meanwhile, the adoption of communications technology seems to be accelerating in business environments as well, as more organizations come to understand the cost efficiencies, flexibility, productivity and creativity that can be gained from services and solutions involving VoIP, unified communication, cloud computing, etc. I use the words communications technology, but perhaps instead I should be using the words communications solutions. That’s because the days of selling technology are in the past; what organizations really want to communications solutions that can help them realize all or some of the above-mentions benefits.

At the same time, CIOs within organizations are morphing from individuals who are solely in charge of the IT staff into people who are playing a central role in driving their businesses forward. As a recent piece in The Wall Street Journal nicely puts it: “Smart CIOs are seeing that the I in their titles isn’t limited to information. They are making it stand for innovation, insight, intelligence, integration and influence. Those CIOs work closely with other C-level executives and report to CEOs who expect them to play a big role in making their companies grow.”

To help support all of the above, both enterprise IT staff and service providers continue to invest in network infrastructure to make our ever-more-connected personal and work lives possible.

“Recovery from the recession continues slowly and unevenly, but telecom and datacom equipment revenues continue to rise and will do so through 2015 at an overall compound annual growth rate of 5.5 percent,” notes Jeff Wilson, principal analyst at Infonetics (News - Alert) Research. “Service provider mobile and wireless infrastructure and enterprise and data center networks make up the largest portions of revenue, and growth through 2015 is fueled by a wide variety or product segments, from communications and security in the enterprise, to service provider IMS (IP Multimedia Subsystems), routing, switching, and Ethernet. We are encouraged to see growth in all but two of the markets we track within this industry.”

Infonetics forecasts the overall telecom/datacom equipment and software market will grow to $209.1 billion by 2015. According to the research firm, worldwide telecom and datacom equipment and software revenue totaled $160.1 billion in 2010, up 6 percent from 2009.

Spending last year was split between service providers and enterprises at a 70:30 ratio. Infonetics believes that the breakdown will be 66 percent to 34 percent by 2015.

Edited by Jennifer Russell