Report: Trend toward NGN telecom service strong in several sectors

MAY 21, 2008 -- The U.S. professional services, finance and insurance, government, and healthcare vertical segments are seeing the benefits of migrating to next-generation services like IP/MPLS and Ethernet, say In-Stat analysts.

MAY 21, 2008 -- Legacy services (i.e. Frame Relay, leased line, and ATM) over the wide area network (WAN) continue to provide the U.S. professional services, finance and insurance, government, and healthcare vertical segments with a reliable, manageable communications infrastructure, but it is evident that these sectors see the benefit of transitioning to next-generation (NGN) services, contends a new report from In-Stat (search for In-Stat). The analyst firm defines NGN services as IP/MPLS and Ethernet services.

"Although these vertical industries are seeking similar goals, the individual motivations and concerns over migration vary by priority and importance," explains Steve Hansen, In-Stat analyst. "From the perspective of the service provider, understanding the migration profiles of each specific vertical can provide insight into how services should be packaged and marketed to that specific sector."

According to an In-Stat survey, legacy services are still in use in over half of the US organizations within the four vertical segments analyzed (professional services, finance/insurance, healthcare, and government).

Over 50% of these current legacy services users are migrating, or plan to migrate, some/all of these services to other services, such as IP/MPLS and Ethernet. But that NGN connectivity must be provided in a manner that protects corporate data, reduces overall cost, can service a remote/mobile workforce, and can be recovered after a disaster, say In-Stat analysts.

The firm's new report, "US Vertical Migration to Next-Generation Services," provides analysis of an In-Stat survey of U.S. businesses regarding NGN services conducted in March 2008. It includes profiles of each market sector, outlining their motivations for migrating to NGN services and their concerns regarding migration.

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