Also, the established telco equipment suppliers who have ruled the carrier market for decades, are not the ones to give up so easily. They have used the same strategy—M&A—to attain datacom advantage. While Lucent and Nortel have made big acquisitions, Siemens, Alcatel, and Ericsson have made smaller ones and created focused business units to meet the new multi-services data-centric network needs.

These changes have impacted not only the carrier data market, but also the broad networking market as well.

The carrier market requires an approach different from that of the enterprise market. While the vendor's role ends with the sale of the product in the enterprise market, it is not so with carrier market. Here the work of the vendor begins after the deal is closed. It involves managing a smaller number of big accounts and taking care of all their needs. It needs focus. Most networking vendors are pushing their low-end products (for the enterprise market) through the distributors and are focusing on the carrier market.

A major challenge—in both the carrier and enterprise market—is coming from the new start-up companies. These small companies react fast. The only known way to counter them so far has been to buy them out.

However, the most important development is the challenge that datacom companies are facing at their home turf—the enterprise market—from the newly empowered telco equipment makers. These companies, enabled by the technological capability and the client base of the datacom companies acquired by them, are eager to have a slice of this market as well. Though some of them have gone for big campaigns and brand building, not many have succeeded. It is the same old story. They really do not understand the fast changing enterprise, as in the carrier market you live from deal to deal—not from product to product. The carrier data business is for a big growth. Even in a country like India, where the carrier revolution has been slow to take off, most datacom companies like Cisco, Nortel Networks (its voice network business is virtually non-existent in India), and 3Com have done more than thirty percent of their business in the carrier (read ISP) segment. And last year was just the beginning of the ISP network rollouts. The figure is likely to be much more this year. It will only get more exciting.