Cloud Boosts Video Network Spending

According to Synergy Research Group, 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 in the first quarter of 2015, growth in network hardware and software came in at 10% and 17% respectively, the research house says. On the network side, individual segments that grew particularly strongly include TV Everywhere, cloud DVR software, search and 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.

For the fourth successive quarter, total revenues from video infrastructure exceeded $10 billion in Q1. Network hardware and software accounted for 51% of the market and client hardware and 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 remains the leading video infrastructure hardware vendor, followed by ARRIS, Pace and Technicolor. On the software side, Cisco is again the leader, followed by NAGRA, ARRIS and Rovi.

"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," wrote John Dinsdale, a chief analyst and research director at Synergy. "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."