Navigating Change....
The PELORUS Group 
Market Research, Consulting and Training

FOR IMMEDIATE RELEASE

PELORUS Estimates Softswitch, Broadband 
Switch Market To Surpass $36 Billion!

                                       Date: November 7, 2000
                                       Contact: Greggory S. Blundell
                                       Phone: 908-707-1121
                                       Fax: 908-707-1135
                                       E-mail: info@pelorus-group.com
                                                                                   

Raritan, NJ - The market for softswitches, a relatively new development in telephony, is driven today in great measure by carrier needs to launch innovative services, quickly, in an already intensely competitive arena. But the market is nascent. Uncertainty characterizes which products and product-marketing approaches will prove successful...The byproduct of a massive migration toward data communications and the Internet, broadband switches - ATM and IP - are also relatively recent phenomena. With the market evolving to broadband interactive applications, traditional switches are giving way to an entirely new breed of data-centric products. A breed that, according to a groundbreaking report from The PELORUS Group, by 2004 will generate $36 Billion.

Entitled "The New Broadband Switching Environment", the report examines, in fine detail, the five-year markets for softswitches, broadband ATM switches, and broadband IP switches. It states that the total market of softswitches, broadband ATM switches and IP switches, sold to enterprises and carriers, was just under $2 billion at the beginning of 2000, but by the close of 2004, will have soared to $36 billion.

The report provides a strategic outlook for four types of vendors. The first, large switch manufacturers, stand the most to lose, although some have opportunities to bolster revenues with new products. The study argues that these companies are at a crossroads, and decisions cast today could mean long term viability. If these vendors cannot develop their own softswitches or broadband switches, they must pursue alternatives, such as licensing the designs, or acquiring companies outright.

Secondly, computer manufacturers can leverage this broadband data trend to move more forcefully into telephony. They are well suited for enterprises, especially those organizations which need system integration and support services. They are also situated to offer customized software as part of their carrier switch suite.

Start-ups, the third category, don’t have to worry about cannibalizing their own product lines. Due to the potential of softswitches and broadband switches, many are extremely well-funded.

Finally, systems integrators: Softswitches are essentially large programs platformed on commercial servers. Sales and installation are a systems integration task. Accordingly, a market emerges for third-party systems integrators like EDS and CSC, since they are expert in customizing complex applications programs. They can also serve as distribution channels.