Service providers are accustomed to technology waves in managed service technologies. Typically a technology (for example, Ethernet) is implemented in the enterprise and over time the distributed nature of multi-location businesses and the ongoing optimization of IT resources presents an opportunity for service providers to provide a managed solution. The waves build slowly, followed by several years of explosive growth, then a gradual decline spanning 10s of years.
IDC has said that 10% of Wireless LANs (WLANs) are managed by third party providers, representing a $1B opportunity. $1B may seem big, but it is only a ripple in the pond. It took frame relay services several years to get to $1B in 1995, but then the market exploded, eventually topping out at around $26B annually in 2006 before declining to about $6B today. Carrier Ethernet took about 7 years to get to $1B in 2005 but has grown to a $44B global services market today, according to Vertical Systems. That’s the funny thing about waves – each successive one seems to get bigger.
As waves build and ebb, people like to ask, just like with stock market bull runs, “What inning are we in?” Frame relay clearly is near the ninth inning, but that last inning will take a long time to play. Carrier Ethernet is probably in the bottom of the fifth, with a nice long stretch of growth still ahead. The $1B Managed Wi-Fi Services market is still in the very early stages – maybe the top of the 2nd inning, bases loaded, with no outs. The drivers are enormous – the mobile worker, the Internet of Things and the evolution of the cloud, just to name a few.
Another important factor to consider is that Managed Wi-Fi Services represent an opportunity for all types of service providers. The traditional telecom and cable operators are adding managed Wi-Fi as an extension of their popular WAN services, but there are just as many industry focused service providers that view managed Wi-Fi as part of their value-add in education, hospitality, healthcare and retail. So this wave will surely swamp the earlier technologies – get your surfboards ready!