VDC Research Group, in partnership with CP-TA, recently completed a quantitative investigation of ATCA adoption trends at Tier I, II, and III network equipment providers (NEPs).  Huge revenue growth forecasts linked to major specification announcement and product releases such as ATCA make great print, as does the failure to meet these initial projections.  However, tying the success or failure of ATCA solely to the adoption trends at Tier 1 NEPs would be ignoring a very real and significant community of ATCA users.  An often overlooked segment of ATCA adoption is occurring at Tier II and Tier III NEPs, where forward-thinking management and development teams are building products that rely on partners supplying merchant technologies and services.
   
Given the huge installed base of proprietary equipment, a long-standing focus on in-house development, and a lengthy certification and integration process due to high-reliability needs of communication equipment, it is not surprising Tier I NEPs adoption has been gradual and cautious.  The business models at Tier II/IIIs are more open and nimble.  Outsourcing development costs of the compute platform to the supplier ecosystem allow these vendors to redirect in-house resources to where they add the most value and are thus best allocated – at the application level.  The ability to outsource development of the compute platform is a competitive advantage for Tier II/III NEPs.  VDC’s data indicates over ¾’s (79%) of Tier II/III and over half of Tier I suppliers surveyed are commercially implementing ATCA now.  As NEPs of all sizes continue the evolution toward a business model utilizing COTS equipment, these numbers are expected to grow.  We believe over 85% of Tier I NEPs will be implementing ATCA by 2010.

ATCA has already begun to build scale.  While growth has trailed earlier expectations, our research indicates a strong market place endorsement for ATCA as the open architecture of choice for Next Generation Telecom and Datacom Networks.  Network equipment providers face pressure to build the IP-centric, server-based next-generation platforms for tomorrow while saving R&D money today.  Even in the current uncertain macroeconomic environment, adoption of ATCA is likely to grow as NEPs of all sizes undertake actions to reduce costs and trim their business models by migrating to a COTS platform.

The results of this research are presented in a White Paper, “ATCA Adoption Trends Within The Network Equipment Provider Community” to be released in the next few weeks.