LONDON--(BUSINESS WIRE)--According to the latest procurement intelligence report from Technavio, the global market for network infrastructure is expected to grow at a CAGR of 7.1% over the next five years due to increased penetration of cloud and rise in adoption of internet-enabled devices.
The research report titled ‘Global Network Infrastructure: Procurement Intelligence Report 2016-2020’ provides an in-depth analysis of category spend, best procurement practices and cost saving opportunities, aimed at helping organizations achieve superior business performance. The report also provides insights on pricing, supplier positioning and top companies, enabling sourcing professionals to improve their competitive advantage through procurement excellence.
“During the forecast period, the network infrastructure market will be driven by the increase in IP traffic, which drives the need for network technology including routers and other high-performing network infrastructure,” says lead Technavio procurement specialist Angad Singh for category spend intelligence. “In addition, growing demand from industries such as BFSI, retail, healthcare, research, and manufacturing, is driving the demand for network infrastructure as access to data is very critical in these industries,” adds Angad.
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Cost saving opportunities in the network infrastructure market
The adoption of various cost-optimization levers helps buyers of network infrastructure realize direct cost savings and enhance category management and value benefits (including reduced procurement complexities).
Technavio procurement experts have segmented the cost saving opportunities in the network infrastructure market into the following value-enhancement opportunities:
- Adoption of technology
- Supplier Competition
- Adoption of negotiation strategies
- Optimization of procurement practices
- Bundling of services
Adoption of technology saving aspects
The adoption of analytics to monitor application behavior and the use of advanced network architecture, such as SDN to provide high bandwidth, along with the adoption of virtualized function networks, such as vRAN to enable centralization of network services can lead to reduced costs to the extent of 30% of the total category spend.
Buyers look for suppliers that offer technologically advanced networks with large bandwidths that can manage increased traffic and can be configured to support frequent innovations.
Supplier competition saving aspects
In the global network infrastructure market, competitive bidding in the form of price discounts and negotiations on value-added services enables suppliers to win business. Suppliers compete for offering services such as assistance on broadband extension and increasing the number of nodes across network devices.
Buyers prefer suppliers with networks that can limit the effects of faults/failure to fewer devices and provide quick recovery. Therefore, they seek suppliers that have well-defined backup mechanisms in place to enhance their capacity to tolerate faults or failures.
Bundling of services saving aspects
One of the most opportunistic strategic cost saving levers in the global network infrastructure market is the bundling of network infrastructure deployment, upgrading, and maintenance services.
Organizations evaluate engagement opportunities with service providers that offer cloud-based services and take ownership for managing network configuration, change, and compliance management.
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Technavio analysts employ primary as well as secondary research techniques to ascertain the size and vendor landscape in a range of markets. Analysts obtain information using a combination of bottom-up and top-down approaches, besides using in-house market modeling tools and proprietary databases. They corroborate this data with the data obtained from various market participants and stakeholders across the value chain, including vendors, service providers, distributors, re-sellers, and end-users.
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