Introduction
 
The public sector in Europe presents a growing opportunity to vendors across the ICT value chain. There are many benefits from installing a converged network across the different sub-segments of the public sector, most notably in healthcare, education and local and central government bodies.
 

 
Scope
 
This report examines the key developments in the converged network space for the European public sector.
 
Discusses important factors to consider for vendors, SIs (systems integrators) and VARs (value-added resellers) when targeting the public sector.
 
Identifies both benefits and inhibitors in the current market for converged networks as well as the delivery of this solution via a managed service.
 
Highlights
 
Purchasing patterns are and will remain dependent on national characteristics, with Germany and France still preferring regional and local suppliers. There will be some move towards sourcing from a single supplier and offering managed services contracts but this will be most pronounced in the UK.
 

 
Datamonitor believes that forging strategic partnerships will be key in moving up the curve and achieving greater levels of verticalization for the public sector. This is particularly true of vendors whose geographical market presence is limited or those keen on developing a vertical applications portfolio.
 

 
Reasons to Purchase
 
Examines key trends in the UK and German public sectors from Datamonitor's ongoing end-user research.
 
Summarizes the key recommendations to converged network vendors selling into the public sector.

TABLE OF CONTENTS
 
CHAPTER 1 EXECUTIVE SUMMARY 3
 
Introduction 3
 
Market context 3
 
Benefits of a converged IP infrastructure 3
 
Potential drawbacks 4
 
ICT budgets 6
 
The future decoded 8
 
Key findings 8
 
Action points 9
 
Proof of solution is essential 9
 
ROI and TCO arguments play well with the public sector market 9
 
Marketing must be very targeted 10
 
Engage with all levels in public sector institutions 10
 
CHAPTER 2 INTRODUCTION 18
 
What is this report about? 18
 
Who is the target reader? 18
 
How to use this report 19
 
CHAPTER 3 MARKET CONTEXT 20
 
Introduction 20
 
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Streamlining public sector networks in Europe DMTC1087
 
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What is a converged IP infrastructure? 20
 
Benefits and drawbacks of a converged IP infrastructure 21
 
Benefits of a converged IP infrastructure 21
 
Potential drawbacks 22
 
Benefits and drawbacks of managed services 23
 
What is driving the market for managed services? 24
 
Concerns in the managed services market 25
 
Public sector market influencers 25
 
EU initiatives to support ICT uptake 26
 
National level ICT uptake 27
 
ICT budgets 28
 
Network spend 31
 
Planned IP telephony deployments 33
 
Case studies 35
 
Schleswig-Holstein Ministry of the Interior (Germany: T-Systems) 35
 
Dutch Ministry of Housing, Town and Country Planning (VROM) (Avaya) 36
 
110,000 UK government workers to use IP telephony (Siemens and Global
 
Crossing) 37
 
Plymouth Hospitals NHS Trust (UK: Mitel) 37
 
Guy’s and St. Thomas’ NHS Foundation Trust Hospitals (UK: Nortel Networks/ BT) 38
 
NATO (North Atlantic Treaty Organization) (Siemens) 38
 
Polish border guard (Cisco and Nextira One) 39
 
Department for International Development (UK—Polycom) 39
 
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Streamlining public sector networks in Europe DMTC1087
 
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Future benefits of a converged IP network 40
 
Voicemail 40
 
Interactive voice response (IVR) 40
 
Contact centers 41
 
Video conferencing 42
 
Unified communications 43
 
Flexible working environment 43
 
Conclusion 43
 
CHAPTER 4 THE FUTURE DECODED 44
 
Introduction 44
 
Key findings 44
 
Purchasing patterns and growth of outsourcing 45
 
Opportunities by geography 46
 
Central and Eastern Europe — VoIP hot spots 46
 
Outlook for vendors in the public sector space 47
 
Partnering with the public sector 49
 
National-level support has fostered UK ICT growth 49
 
Expectations of a public sector-vendor relationship 49
 
Gershon’s challenge to ICT suppliers 50
 
Procurement trends in the public sector 51
 
Conclusion 51
 
Certain areas of the public sector are more IP-aware 51
 
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CHAPTER 5 ACTION POINTS 53
 
Introduction 53
 
Proof of solution is essential 53
 
ROI and TCO arguments play well with the public sector market 53
 
Marketing must be very targeted 54
 
Engage with all levels in public sector institutions 54
 
Identifying appropriate public sector targets 55
 
Systems integrators play a strong role in many public sector deals 55
 
Conclusions 56
 
CHAPTER 6 APPENDIX 57
 
Definitions 57
 
Research methodology 58
 
Further readings 59
 
SPP writing team 59
 
How to contact experts in your industry 59
 
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Streamlining public sector networks in Europe DMTC1087
 
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LIST OF TABLES
 
Table 1: UK public sector agencies’ ICT budget 2003/ 2004 6
 
Table 2: German public sector agencies’ ICT budget 2003/2004 7
 
Table 3: UK public sector agencies’ ICT budget 2003/ 2004 28
 
Table 4: German public sector agencies’ ICT budget 2003/2004 30
 
Table 5: Importance of network spend over the next 3 years for UK public
 
sector agencies 31
 
Table 6: Importance of network spend over the next 3 years for German public
 
sector agencies 32
 
Table 7: UK public sector agencies planning to implement IP telephony 34
 
Table 8: German public sector agencies planning to implement IP telephony 35
 
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LIST OF FIGURES
 
Figure 1: UK public sector agencies’ ICT budget 2003/2004 6
 
Figure 2: German public sector agencies’ ICT budget 2003/2004 7
 
Figure 3: Typical path towards a converged network 21
 
Figure 4: UK public sector agencies’ ICT budget 2003/2004 28
 
Figure 5: German public sector agencies’ ICT budget 2003/2004 29
 
Figure 6: Importance of network spend over the next 3 years for UK public
 
sector agencies 31
 
Figure 7: Importance of network spend over the next 3 years for German public
 
sector agencies 32
 
Figure 8: UK public sector agencies planning to implement IP telephony 33
 
Figure 9: German public sector agencies planning to implement IP telephony 34
 
Figure 10: Comparison of UK and German public sector agencies’ purchasing
 
patterns: supplier numbers and outsourcing trends 45
 
Figure 9: Selected vendors’ market position and vertical focus 47
 
Figure 11: Datamonitor’s market expertise and research and analysis
 
methodology