Forrester Research: Forrester Retail Insights Telecom & Networks First Look: Research & Event Highlights From Forrester

 25 Feb. 2005
SBC-AT&T Merger Makes Sense
The acquisition of AT&T by SBC is highly complementary for business customers across voice and data, landline, and mobile services. The deal will have little impact on the consumer telecommunications market. Enterprise customers should take steps to protect their service agreements from integration disruptions and should expect the wave of telecom supplier consolidation to continue.


Consumers Cool To Voice Over IP
We surveyed 1,132 online households from Forrester's Ultimate Consumer Panel. From these surveys, we learned that many consumers have heard of VoIP but few are interested -- and even fewer are using it.


Europe's Enterprise VoIP Future: Gradual And Managed
VoIP will be one of the hottest areas in the European enterprise communications market in 2005. The technology is maturing, the business case is looking better, and enterprises are warming up. But the telecom environment is more complex and fragmented in Europe than in North America; as a result, Forrester expects European enterprises to opt for more managed and hosted VoIP solutions than their North American peers. It will be at least 2008 before a majority of Western Europe's end-to-end enterprise fixed-voice traffic will be IP-based.


Cisco Broadens WLAN Strategy, Acquires Airespace
Standalone WLAN switch vendor Airespace plugs a hole in the current Cisco Structured Wireless-Aware Network (SWAN) architecture, which espouses a tightly integrated wireless and wired infrastructure. With Airespace, Cisco gets three important things:
A reasonably priced standalone WLAN switch for Cisco's SMB market.
An alternative WLAN switch architecture for large enterprises.
Sophisticated, software-based management and a robust security suite.

The deal is good for risk-averse customers and spells trouble for WLAN switching startups like Aruba Wireless Networks
and Trapeze Networks, as well as Airespace OEM partners like Nortel Networks and Alcatel.

Charting The Future Of Tech Connections
Consumer technology suppliers are looking for better ways to link devices across the desk, the house, the neighborhood, and the world. Which connection option will win? Wi-Fi will continue to offer a great general-purpose home networking solution, but specialized connectivity options will win out for certain applications: ZigBee for home automation, mobile infrastructure for voice -- given the right pricing model, and UWB for simple device connectivity. WiMAX remains a technology with great promise and the potential to grab market share from both the mobile and broadband provisioning ecosystem, but high prices and the lack of standards and commercial rollouts currently limit its prospects.


Central And Eastern Europe Mobile Forecast
Mobile penetration in Central and Eastern Europe (CEE) lags that in Western Europe by four years. Bright spots: Relatively wealthy Slovenia and the Czech Republic
will exceed the 2005 mobile penetration rate of France and the UK, based on government policies that have helped drive aggressive competition. Mobile Internet usage will remain low until 2007, partly due to an installed base of GSM-based phones that lack features and speed needed to drive adoption.


Forecast: CEE Mobile Internet Users, 2005 To 2010
Forecast: CEE Mobile Internet Users, 2005 To 2010

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Dear subscriber,

Many of you have asked for more specific focus on Telecom & Networks coverage, so I'm pleased to introduce a quarterly First Look dedicated to this team's work. We have both Americas-based and European analysts. We also partner closely with our colleagues in the Computing Systems; Devices, Media, & Marketing; and Customer Experience teams, and early next quarter we will publish the results of our first specialized Technographics survey, now underway. The ongoing turmoil and dramatic changes in this space will affect one of the largest pieces of your IT budget. If you haven't already signed up for Telecom & Networks First Look on Forrester.com, I urge you to subscribe and keep up with developments. I'll feature research from all the analysts mentioned here. If you would like to continue receiving this newsletter on a quarterly basis, you must either reply to this email or visit our Email Subscriptions page. As always, First Look is free of charge, and you can opt not to receive it at any time.



Merv Adrian
Senior Vice President
mervadrian@forrester.com

IP VPNs: Build Or Buy?
To date, enterprises are taking the do-it-yourself approach to building IP VPNs with technologies like IPsec and SSL. Fifty-six percent of North American enterprises plan to replace Frame Relay with some amount of IP VPN in 2005. There is still one looming question: Should we do it ourselves or turn to managed services? Large enterprises should consider purchasing IP VPN services, while small and medium-size enterprises should stick to an in-house approach. If you're building, Check Point Software Technologies, Cisco, and Juniper Networks offer the best combination of products, management platforms, and support. But ultimately, your internal IT and network staff will determine the right solution. If you lack the resources, a managed service is always a no-brainer. In the recent Forrester Wave report Evaluating Managed IP VPN Services, we found that the top two were AT&T and MCI.

SSL, IPsec, And MPLS Are The Primary IP VPN Technologies New technologies like MPLS and the maturation of network-based VPN infrastructure provide enterprises with cost-effective and reliable IP VPN services that they can buy. Here's how they fit into the technology infrastructure.

Getting To 3 Billion Mobile Users
There are 1.5 billion mobile telecom users today -- a quarter of the world's population. An additional 3.5 billion people live within the coverage area of a mobile cellular network. GSM is the leading standard: 82% of mobile users connect via GSM networks. To grow their base by another 1.5 billion mobile users, handset manufacturers and mobile operators need to turn to emerging nations. The GSM Association of mobile operators is working to take the first steps toward addressing this by attacking high handset prices and prohibitive taxation. A third inhibitor, high service prices, will be more intractable.

Please Join Us At GigaWorld
Forrester's North American GigaWorld IT Forum 2005 will be held in Dallas, Texas, from May 2 to 5. The Telecom & Networks team and colleagues have a number of key presentations on the agenda this year, including:

  • Spring 2005 Telecom Technographics Survey Results -- Lisa Pierce
  • Sourcing Global Wide-Area Network Services -- Brownlee Thomas, Ph.D.
  • VoIP Services: Forrester Wave Analysis -- Lisa Pierce
  • Right Time Communications Transform Business Connections -- Elizabeth Herrell
  • Developing Winning Speech Applications -- Elizabeth Herrell
  • Building A Better Speech Interface -- Moira Dorsey
  • Building Tomorrow's More Secure Network -- Laura Koetzle, Paul Stamp, and Robert Whiteley
  • The Role Of Enterprise Infrastructure Management For Integrated IT Management -- Thomas Mendel, Ph.D.
  • Visibility Is Key To Successful IT Management And Integrated IT Management Is Making It Possible -- Margo Visitacion, Thomas Mendel, Ph.D., and Phil Murphy.

And our vendor clients will find this one useful:
  • Understanding How Enterprises Choose Their International Telecom Service Provider -- Brownlee Thomas, Ph.D.

Upcoming Research
The team has some important research coming up in the next few months. Here are some highlights of longer documents:
  • Developing An Organizational Strategy For IP Telephony -- Elizabeth Herrell
  • Building A Business Case For IP Telephony -- Elizabeth Herrell
  • Forrester Wave: Evaluating Global WAN Services -- Brownlee Thomas, Ph.D.
  • Buying International Telecom Services In A Still-Shaky Market -- Brownlee Thomas, Ph.D.
  • Organic Networks -- Robert Whiteley
  • Building Security Architecture Around Appliances -- Paul Stamp
  • Where Does Security Fit? -- Paul Stamp
  • Choosing An Enterprise WLAN Platform -- Ellen Daley

In addition, the aforementioned upcoming results of our Technographics survey should be a good source for a number of pieces; Lisa Pierce will take the lead. There will also be numerous short pieces driven by Client Choice selections, Inquiries, and ongoing Events. We hope you'll follow closely, and as always, that you'll send us your comments on the research you read. We read every one, and they have a big impact on our work.


Upcoming ForrTels
ForrTels are live, interactive, hourlong teleconferences incorporating a simultaneous WebEx slide presentation by a Forrester analyst, followed by an open forum for questions and discussion.

Who Wants To Buy VoIP
March 4, 2005, 1:00 p.m.-2:00 p.m. Eastern time

Wireless LAN Grows Up: Managing It Correctly
March 15, 2005, 1:00 p.m.-2:00 p.m. Eastern time



Research Referenced In This Issue

Central And Eastern European Mobile Forecast: 2005 To 2010 (36246)
Charting The Future Of Tech Connections (36142)
Cisco Broadens WLAN Strategy, Acquires Airespace (36261)
Europe's Enterprise VoIP Future: Gradual And Managed (36123)
Evaluating Managed IP VPN Services (34942)   
Getting To 3 Billion Mobile Users (36399)
IP VPNs: Build Or Buy? (36274)
SBC-AT&T Merger Makes Sense (36362)
Who Wants To Buy VoIP? (35357)


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