Monday, March 3, 2014

Infonetics: SDN Creating Hesitancy in Carrier Routing/Switching Market

SDN is leading the carrier router/switch market into a period of hesitation, according to new report from Infonetics.


“Major change is in the air as carriers of all sizes proceed cautiously with router and switch spending, in part because they are trialing SDN (software-defined networking) or just beginning to figure out how to proceed with SDN,” says Michael Howard, principal analyst for carrier networks and co-founder of Infonetics Research. “The fourth quarter is usually an indicator for the current year and sometimes a bellwether for the future. In the most recent quarter (4Q13), North America had a double-digit sequential decline in carrier router/switch revenue rather than the usual budget flush, with weakness coming mostly from Verizon and AT&T, among the global leaders of SDN activities.”

Some highlights of the report:

  • In 2013, worldwide service provider router and switch revenue—including IP edge and core routers and carrier Ethernet switches (CES)—was $14.5 billion, up just 2% from 2012
  • 4Q13 carrier router/switch revenue is down 4% from the same period a year ago
  • Prompted by the move to 100GE, the core router refresh is still mildly in motion: Core routers are up 3.3% for the full year 2013, but flat quarter-over-quarter (4Q13 from 3Q13)
  • There is intensifying focus on multiple content delivery networks (CDNs) and smart traffic management across routes, aimed at making routers and optical gear cooperate more closely
  • The top 4 manufacturers – Cisco, Huawei, Alcatel-Lucent, and Juniper stayed in dominant positions in 2013, together taking 83% of global carrier router and switch revenue
  • Over the past 2 years, Huawei has increased its market share the most of any vendor
  • With SDN hesitation slowing router and CES spending, Infonetics now expects worldwide service provider router and switch revenue to grow at a low single-digit CAGR from 2013 to 2018, when it will reach $17.2 billion

http://www.infonetics.com

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