Time and again the telecommunications industry has undergone dramatic cyclical shifts brought about by technology changes in bandwidth and processing power. These changes have altered the way networks were built and deployed, owned and managed, and which service and equipment providers thrived or fell by the wayside. Understanding these and other fundamental changes in the telecom industry is the key to knowing where future opportunities lie.

For instance, in the early 1980's, private line networks were common for large businesses. They were largely dumb-transport networks and required little in the way of network intelligence or processing. They were often managed by large client-side telecom staffs, and were treated almost as company-owned assets.

In the early 1990's, the paradigm shifted to one of more intelligent, processor-intensive switched networks utilizing new technologies like Frame Relay or ATM that allowed clients to reduce telecom staffs, reduce capital investment in network infrastructure, and hand-off complicated network management to carriers.

By the turn of the millennium, the paradigm was shifting once again back to its original state. Driven by the emergence of optical networking, the collapse of many carriers, and the large pool of excess talent and equipment, large companies once again found reason to build, own and manage private point-to-point networks, this time on lambdas rather than private lines. Also, there is an increasing "virtualization" of corporate enterprise networks leveraging the growth of IP, Ethernet and wireless.

Large enterprises are increasingly stripping out the value-added element of tariffed network services by controlling on their own network gear which have the features that drive value. Thus, carrier-oriented equipment manufacturers must learn to sell to enterprises. For carriers, the ubiquity of IP will mean hosted applications become a key point of differentiation to offset continued commoditization of the transport layer.

Magee Group has anticipated, followed, and watched these changes take place for more than 25 years. We use that perspective to help our clients understand where to position themselves in the marketplace today and tomorrow.

Here is where we believe the most interesting opportunities lie in the near future: