IDC Finds Multiservice Provisioning Platforms Buck Downward Trend, Continue Healthy Growth

FRAMINGHAM, MA – JULY 29, 2003 – Even as the overall optical equipment market continued to contract in 2002, the worldwide SONET/SDH multiservice provisioning platform (MSPP) market posted a 25% revenue gain to reach $1.4 billion. As early as the end of this year, MSPPs could emerge as the largest segment in next-generation optical networking, according to a new IDC study.


"In the span of three years, a market segment that began with a small California start-up has become a cornerstone of next-generation optical networking. Moving forward the MSPP segment remains positioned for further growth," said Sterling Perrin, Senior Research Analyst, Optical Networks, at IDC.

IDC forecasts that worldwide MSPP revenue will approach $1.6 billion in 2003 and will increase at a 18% compound annual growth rate to reach $3.2 billion by the end of 2007.

MSPPs are new network elements that are built on next-generation SONET/SDH technology and are designed to

replace older SONET/SDH add/drop multiplexers in carrier networks. Several factors have converged to boost MSPPs, even as some other optical areas are slumping:

The market shift away from CLECs and back toward incumbent carriers has favored MSPP growth, as MSPPs, which are rooted in SONET and SDH technology, appeal most strongly to incumbent carriers.

Continued growth in data traffic and increased strategic focus on data services are driving carriers to choose MSPPs over legacy SONET/SDH ADMs. Key to the MSPP value proposition is its ability to handle data traffic more efficiently and more cheaply than legacy SONET/SDH equipment.

Traditional telecom vendors are bringing MSPPs to market, making the decision to move to MSPPs seem less risky for their existing carrier customers.

MSPPs have a global appeal. Although MSPPs were initially launched during the North American telecom boom, MSPP vendors generated 64% of their revenue from countries outside North America in 2002.

The findings appear in a new IDC report entitled Worldwide Multiservice Provisioning Platform Forecast and Analysis,

2003-2007 (IDC #29728). This study forecasts the five-yearrevenue opportunity for MSPP equipment from 2003 to 2007, breaking the market down by geographic region. The study also identifies market share leaders for 2002 on a level and in the North American market.

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