Infonetics: Global Carrier Router & Switch Market up strongly in 2Q14, but down 4% YoY

Infonetics Research released vendor market share and preliminary analysis from its 2nd quarter 2014 (2Q14) Service Provider Routers and Switches report. (Full report available by Aug. 29.).  Also see companion report highlights below.

2Q14 CARRIER ROUTER AND SWITCH MARKET HIGHLIGHTS:
. 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
. Though the quarter’s increase was solid, the long-term trend is reflected in the decline of 4% from the year-ago quarter (2Q13)
. 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

Analyst Comment:

“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 Michael Howard, principal analyst for carrier networks and co-founder of Infonetics Research.

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.” 

 

ROUTER & SWITCH REPORT SYNOPSIS:
Infonetics’ quarterly service provider router and switch report provides worldwide, regional, China, and Japan market share, market size, forecasts through 2018, analysis, and trends for IP edge and core routers and carrier Ethernet switches. Vendors tracked: Alaxala, Alcatel-Lucent, Brocade, Ciena, Cisco, Coriant, Ericsson, Fujitsu, Hitachi, Huawei, Juniper, NEC, UTStarcom, ZTE, others. To buy the report, contact Infonetics: 

www.infonetics.com/contact.asp


Companion Report: Router and Switch Vendor Leadership: Global Service Provider Survey

Infonetics Research released excerpts from its annual Router and Switch Vendor Leadership: Global Service Provider Survey, which explores service providers’ perceptions of edge router and carrier Ethernet switch (CES) manufacturers and their criteria for choosing vendors.

ROUTER / SWITCH SURVEY HIGHLIGHTS:
. In addition to being named the top router/CES manufacturers by carriers in Infonetics’ survey, Alcatel-Lucent, Cisco, Huawei, and Juniper are also the leading vendors worldwide in router/CES revenue market share
. Making up a distant second tier of vendors as rated by service providers are, in alphabetical order, Adtran, Ciena, Ericsson, Overture Networks, Tellabs, and ZTE
. In the survey, operators also rank vendors of carrier Ethernet switches and routers based on 10 specific criteria: technology innovation, security, management software, price to performance ratio (value), product reliability, pricing, product roadmap, financial stability, solution breadth, and service and support
. Over 80% of service provider router and switch spending is on edge routers and carrier Ethernet switches (CES)

Analyst Comment:

“The carriers participating in our latest router/switch survey tell us that when it comes to choosing an edge router/CES manufacturer, it’s product reliability, value, and service and support that matter most,” notes Michael Howard, Infonetics Research’s co-founder and principal analyst for carrier networks. 

Howard continues: “Then in an open-ended question, we asked carriers to name the top 3 edge router/CES manufacturers and Cisco came out on top, with 90% of our respondents naming them, followed by Juniper, Alcatel-Lucent, and Huawei. Three out of these four vendors earn top marks from our service providers in at least two of the top vendor selection criteria.”

 

     

ABOUT THE SURVEY:
For its 18-page router/switch vendor leadership survey, Infonetics interviewed network equipment purchase-decision makers at 31 incumbent, competitive, and mobile operators and MSOs from Europe, the Middle East, and Africa (EMEA), Asia Pacific, North America, and the Caribbean and Latin America (CALA). Together, the operators represent 41% of global telecom capex. The survey sheds light on how service providers select router and carrier Ethernet switch (CES) manufacturers, whose equipment they have installed and will evaluate for future purchases, and which manufacturers they consider to be leaders in key manufacturer selection criteria. To buy the report, contact Infonetics:

www.infonetics.com/contact.asp


RELATED REPORT EXCERPTS:

. Infonetics’ August Carrier Routing, Switching, and Ethernet research brief:
http://www.infonetics.com/2014-newsletters/Carrier-Routing-Switching-and-Ethernet-August.html
. Operators plan to move security, QoS, VPN, other services to virtual routers, shows survey
. Infonetics Research unveils new logo
. $1 trillion to be spent on telecom and datacom equipment and software over next 5 years
. Ethernet 10G and 100G service revenue set to grow to 300% by 2018
. Telecom operators spending $150 billion over 5 years on carrier Ethernet gear, driven by IP

SDN WEBINAR:
Join Michael Howard Sept. 4 at 11:00 AM EDT for Making Your Network Run Hotter With SDN to examine SDN architectural concepts that address challenges operators face today, including a look at actual operator SDN deployments. Attend live or access the replay at: http://w.on24.com/r.htm?e=828549&s=1&k=F60165254CA9F9103599DE4F83EDD3BC.

ANALYST CONFERENCE CALL FOR CLIENTS:
Clients, join Michael Howard Sept. 11 at 12:30 PM EDT for his live carrier routing and switching market recap and outlook, or view on-demand: www.infonetics.com/cgp/login.asp?id=865.

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