Yankee Group Analysts Provide Industry Predictions for 2001

    BOSTON, Jan. 5 /PRNewswire/ -- Each of the Yankee Group's research groups
 has taken stock of its predictions for 2000, assessed its accuracy, and
 forecasted their trends for 2001.  The Yankee Group's leading industry experts
 address the areas crucial to e-business success for 2001, predicting the
 market trends for the communications, networking, wireless and Internet,
 energy, and media and entertainment markets.  Several key predictions in our
 many market focus sectors include:
 
     Customer care and billing market space will abound with merger and
 acquisition activity.  With the stock valuations of many public companies
 (i.e. Portal, Daleen, etc.) having suffered, and other companies emerging as
 stronger worldwide players (i.e. Geneva), these companies could be now
 considered prime targets for acquisition.  In addition, larger companies like
 Nortel Networks, and Cisco Systems may be looking to acquire some of the
 players in the billing space to complete or add to their end-to-end solution
 offerings, making them a one-stop shop for both hardware and software.
     Deployments of wireless Internet solutions will finally take hold, and
 rapidly growing service firms will make major commitments in this area.
 Because wireless technological innovation is mostly located in Europe, expect
 to see many more acquisitions of European wireless service firms by North
 American companies that are trying to quickly develop wireless capabilities
 for the coming wireless wave.  Because selling a wireless solution is
 difficult, service vendors will have to provide extensive consulting so that
 users can understand the opportunities in wireless.  As a result, we expect
 strong growth in consulting.
     Emergence of carrier-scale storage solutions is imminent, and they will
 become available over the next 12 months.  These solutions will be highly
 scalable, easy to manage products that meet or exceed current performance
 measures, and will be adopted first by storage service providers.
     Ethernet won the technology makeover of the year award in 2000 and will
 live up to the hype in 2001 with the first 10 gigabit interfaces shipping.  By
 the end of the year, all of the major carrier focused Ethernet switch and
 router vendors will announce that they will adopt the IEEE 802.17 standard for
 Resilient Packet Rings.
     Merger and acquisition game of long distance carriers in 2001 will see a
 rise with major internal changes taking place in many of the IXCs, as well as
 the recent volatility of their stock prices.  A portion of one of these major
 players will end up being the target of a takeover.  Whether a major
 international carrier or a next-generation IXC makes the move, no one should
 be surprised to see a significant change in the make-up of the major
 telecommunications service provider market.  And even if the IXCs are not the
 target of a merger or acquisition, they themselves are very likely to make a
 serious play for some of the struggling CLECs and the new technology and local
 footprint they offer.
     Online content syndication provider market extends to corporate
 enterprises.  As the consumer portals scramble for profits, players in the
 content syndication and aggregation arena emerge to help make doing business
 in the content market cost effective and (eventually) profitable.  As business
 intelligence quickly becomes an online content management issue for
 enterprises, consumer focused online content syndication solutions providers
 such as iSyndicate and ScreamingMedia will expand their capabilities to
 include developing content management solutions for corporations.
     Outside of the top mass-market online retailers, a number of Internet-only
 retailers are quietly and effectively building successful small businesses on
 the Internet in markets that include specialty home goods, high-margin
 fragrances, and niche market apparel.  Because these small Internet-only
 online retailers are privately held, they are insulated from the growth
 expectations of investors in the public market.
     Satellite broadband services such as Direct PC, StarBand, and WildBlue
 will have approximately 1 million subscribers in the United States, by
 year-end 2001.  Rural America offers a vast -- and largely untapped -- market
 for high-speed access to the Internet.  According to the U.S. Census Bureau,
 approximately 30% of U.S. homes are in rural counties.  Yet telcos and cable
 operators continue to concentrate on first- and second-tier markets.
 Deploying cable modems and DSL to a few widely dispersed homes is technically
 and financially impractical, especially for the smaller operators and local
 exchange carriers (LECs) that serve rural markets.  Satellite operators,
 however, already cover over 90% of homes in the United States.  Thus, they are
 best situated from a technology, as well as a business, standpoint to bring
 broadband access to the rural markets.
     Scale and scope of wireless usage will continue to expand, and wireless
 data will be driven primarily by adoption of messaging applications,
 particularly for enterprise customers.  Although the Yankee Group expects
 9.4 million wireless data users (including SMS) by the end of 2001, over
 50% of them will use their data service almost exclusively for messaging
 applications such as email, SMS or instant messaging.
     Wholesale of metropolitan fiber networks into U.S. Tier 2 and 3 cities
 will witness extensive construction in 2001.  With their ability to fund
 capital expenses, utilities are presented a ripe opportunity to ride the wave
 of the metro carriers' carrier trend.
     2.5G and 3G network deployments will be delayed based on the bottlenecks
 at getting enough commercial wireless terminals to support market deployments,
 and operators will experience significant problems working out the kinks.
     Internet users will continue to grow unabated in Asia-Pacific markets,
 although rates of growth will vary from country to country.  In the larger
 countries like India and China, where there is a staggeringly large
 addressable population, the number of Internet users will continue to grow at
 a frenetic pace.
     Mobile Subscriber Growth after a decade of exponential expansion of mobile
 services, the Asia-Pacific market will show signs of a slowdown in 2001.
 Total cellular subscribers in the region will increase by 5% to 275 million by
 the end of 2001, compared to an estimated 50% growth rate in 2000.  Reaching a
 penetration level of 70%, there will be little if any upward potential for
 Hong Kong and Taiwan.
     VoIP:  Building value proposition as telecom operators in Asia-Pacific
 head down the convergent path, the inclusion of VoIP will become a key
 differentiator for operators to ensure long-term sustainability by creating
 added value.  VoIP veterans are expected to play an enormous part due to their
 sense of market needs.  Among the major applications, we expect that IP fax,
 Web-based call centers, and unified messaging will take the early lead and
 find mainstream popularity in the business world.
 
     About the Yankee Group
     The Yankee Group is an internationally recognized leader in technology
 research and strategic consulting, whose broad-reaching analysis encompasses
 all areas essential to e-business success: the Internet, electronic commerce,
 communications, wireless/mobile, computing, and enterprise applications.  The
 Yankee Group specializes in assisting companies with their e-business,
 enterprise networking, and Internet technology and electronic market
 initiatives while maintaining synergy with their overall business strategies.
 Headquartered in Boston, the company's research and sales staff is located
 throughout North America, Europe, Latin America, and Asia-Pacific.  With over
 30 different planning services, complete consulting capabilities, and a full
 calendar of technology-focused conferences and seminars held around the globe,
 the Yankee Group is truly a "one-stop shop" for strategic analysis and advice
 on the information technology industry as a whole.  The Yankee Group continues
 to distinguish itself by providing comprehensive research, electronic content
 delivery, and the industry's only personalized one-to-one approach for client
 inquiry.  For additional information regarding the Yankee Group and the
 services it offers, please visit the company's Web site at
 www.yankeegroup.com .
 
 

SOURCE Yankee Group

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