Video infrastructure spending outstrips client hardware and software revenue

Monday, June 22nd, 2015
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Cloud Helps to Boost Video Infrastructure Network Spending

RENO, NV — New Q1 data from Synergy Research Group shows that revenue growth from video infrastructure network hardware and software is far outstripping growth from client hardware and software. While revenue from all video infrastructure grew by 7% on a rolling year-on-year basis, growth in network hardware and software came in at 10% and 17% respectively. On the network side, individual segments that grew particularly strongly include TV Everywhere, cloud DVR software, search & recommendation, CCAP and media data center. On the client side the strongest growth segment was media streaming devices. Meanwhile, revenues from content security declined somewhat despite the growth in DRM and cardless solutions.

Video Infrastructure Market Growth - Network Software, Network Hardware, Client Hardware, Client Software, Content Security, Average-All Segments - Rolling Year-on-Year Revenue Growth-Q1 2015

For the fourth successive quarter total revenues from video infrastructure exceeded $10 billion in Q1. Network hardware & software accounted for 51% of the market and client hardware & software 44%, with content security making up the balance. Across the whole market, revenues from hardware were some six times bigger than software revenues. Cisco Systems remains the leading video infrastructure hardware vendor, followed by Arris Group, Pace plc and Technicolor. On the software side Cisco is again the leader, followed by Nagra, Arris and Rovi Corporation.

“While there remains a huge market for set-top boxes and other client devices and associated software, there is clearly a drive to make more functionality network based,” said John Dinsdale, a Chief Analyst and Research Director at Synergy Research Group. “We are seeing cloud architectures and network-delivered features tilt the balance of video infrastructure spending in favor of the network and away from the client side. There is no doubt this trend will continue over the coming years.”