Big market for IP managed services

A study by market tracker Ovum and commissioned by Cisco finds that the market for four specific managed services will grow to $66 billion by 2012.

The four services are managed metro Ethernet, managed IP VPNs, managed IP voice and managed security. The report notes that the market for these services is currently growing at a compounded annual rate of 18%.

The study was based on data collected from more than 1,300 individuals in companies using managed services in 14 countries across the Americas, Europe, Middle East, Africa and Asia. The companies are in the finance, manufacturing, retail, government, healthcare and education markets.

The study found that the current global market for managed IP VPN services is the largest among the managed services studied, at $17 billion. By 2012, managed IP VPNs will remain the most widely deployed adopted service, though IP voice is the fastest-growing managed service with a 39% CAGR for the forecast period.

Europe currently leads in the adoption of managed services but will be overtaken by the North American market, which is expected grow to be the largest market in the world for managed services by 2012, the study found. Asia Pacific is projected to have the most rapid growth fueled by managed service adoption in India and China, with a CAGR estimated at 27%.

The manufacturing industry remains the vertical industry that uses the most managed services, followed by finance and retail. Government fell from third to fourth place in managed services adoption since the first report was published in February 2006.

This is all good for Cisco, of course, because the company is the leading supplier of IP routers to managed service providers.