Wednesday, August 27, 2014

Infonetics: Strong Sequential Growth for Carrier Routers and Switches

Worldwide service provider router and switch revenue, including IP edge and core routers and carrier Ethernet switches (CES), is up 20% in 2Q14 over 1Q14, to $3.9 billion, according to Infonetics Research. However, Infonetics said the long-term trend is reflected in the decline of 4% from the year-ago quarter (2Q13).


“As we’ve been cautioning, service providers of all sizes are being more guarded with their router spending habits as massive network transformation goals involving software-defined networking (SDN) and network functions virtualization (NFV) translate into specific activities and milestones. But this does not mean router and switch spending will tank or even take a sizeable downturn,” notes Infonetics Research analyst and co-founder Michael Howard.

Continues Howard: “Core router upgrades and replacements prompted by the move to 100GE and paired with many aging core routers drove the core router segment to 11% sequential growth in the second quarter of 2014, and with a lot of capacity ‘in the ground,’ we believe core routers will stay positive for the full year.”

Some highlights:


  • The IP edge router, IP core router, and CES segments all had double-digit revenue gains in 2Q14 from 1Q14
  • On a year-over-year basis, EMEA is the only region to achieve positive revenue growth (+3%) in the carrier router and switch market in 2Q14, while all regions—North America, EMEA, Asia Pacific, and CALA—are up quarter-over-quarter
  • The usual suspects continued to battle it out for the top 4 router and CES market share spots: Cisco stayed in the lead in 2Q14, with Alcatel-Lucent, Huawei, and Juniper (listed in alphabetical order) in a fight for the 2–4 positions
  • Infonetics expects global service provider router and switch revenue to grow at a 2.8% CAGR from 2013 to 2018


http://www.infonetics.com/

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