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Networking software market sizzles

Driven by ever-increasing numbers of Internet users, the network-management software market is booming, says a recent study.

Driven by ever-increasing numbers of Internet users, the network-management software market is booming, according to a recent study.

Most network management software has typically been sold along with hardware such as routers and switches, which form the infrastructure of both corporate networks and the public Internet. Now, according to International Data Corporation, sales of network management software are breaking free from hardware sales and becoming a major revenue source for equipment makers.

Network management software helps companies monitor bandwidth use, spot potential network bottlenecks, and pinpoint failing equipment. IDC expects the market to approach $3.3 billion in 1999 and $4.4 billion by 2003.

IDC looked at business generated by companies like IBM, Hewlett Packard, Telcordia Technologies, and Network Associates selling network management tools and other software between the years 1996 and 1999.

Elisabeth Rainge, research manager at IDC, said the Internet and the growing clout of network service providers are prompting the shift. "Growing demand of service providers will drive the market. In fact, the service provider market will be the single-most important dynamic shaping the network and service management market over the next five years."

According to IDC, network service providers accounted for 51 percent of network management spending in 1998. In 1999, they will be the source of 55 percent of the market's revenues, and by 2003 they will generate a dominating 71 percent.

The bulk of network management products will be devoted to so-called "carrier-class" high availability and massive scalability systems used to support the ever-increasing demand for Internet bandwidth, Rainge said.

In addition to product shifts, IDC believes the market will also experience a change among the players with startups, mergers, and acquisitions accentuating market activity.