Enterprise Connectivity Spending Grows, Telco Share Declines

When analyzing firm performance in the connectivity business, it always helps to remember that “my firm’s performance” can be quite different from “overall industry performance” or “industry segment performance” or “peer performance.” 

For example, total global spending by enterprises on connectivity service provider products has grown since 2000, by about 300 percent. But shares of that revenue earned by “telcos” have fallen from 80 percent to about 40 percent. 

Meanwhile, shares earned by specialists of various types--including managed service providers and cable TV companies, for example--have grown from about 10 percent share (each) to as much as 25 percent to 35 percent share of market. 

Year	Total Spending	Telco Market Share	MSP Market Share	Cable TV Market Share
2000	$100 billion	80%	10%	10%
2010	$200 billion	60%	25%	15%
2020	$300 billion	40%	35%	25%
2030	$400 billion	30%	40%	30%

Growing enterprise spending does not automatically translate into higher revenues for all providers.