[May 29, 2014]

Infonetics: 'SDN Hesitation' Slows Carrier Router and Switch Spending in 1Q14

Market research firm Infonetics Research released vendor market share and analysis from its 1^st quarter 2014 (1Q14) Service Provider Routers and Switches report.

ANALYST NOTE

"Last quarter, we identified the 'SDN hesitation,' where we believe the enormity of the coming software-defined networking and network functions virtualization (NFV) transformation is making carriers be more cautious with their spending. This hesitation reared its head in the first quarter of 2014, where global service provider router and switch revenue increased only 2% from the year-ago quarter," notes Michael Howard, principal analyst for carrier networks and co-founder of Infonetics Research.

"We believe the current generation of high-capacity edge and core routers can be nursed along for a while as the detailed steps of the SDN-NFV transformation are defined by each service provider-and many of the largest operators in the world are involved, including AT&T, BT, Deutsche Telekom, Telefónica (News - Alert), NTT, China Telecom, and China Mobile," continues Howard. "And there is intensifying focus on multiple CDNs (content delivery networks) and smart traffic management across various routes and alternative routes to make routers and optical gear cooperate more closely."

CARRIER ROUTER AND SWITCH MARKET HIGHLIGHTS

• The global carrier router and switch market, including IP edge and core routers and carrier Ethernet switches (CES), totaled $3.2 billion in 1Q14, down 13% from 4Q13, and up just 2% from the year-ago quarter
• Revenue for all product segments-IP edge and core routers and CES-declined by double digits sequentially in 1Q14
• Likewise, all major geographical regions (NA, EMEA, APAC, CALA) are also down from the prior quarter, though all but N. America are up from the same period a year ago
• The top 4 router and CES vendors stayed in dominant positions in 1Q14, but positions 2-4 played musical chairs: Cisco maintained its lead, Juniper rose to 2^nd, Alcatel-Lucent rose to 3^rd, and Huawei dropped to 4th
• Infonetics is projecting 5-year (2013-2018) CAGRs of 4.3% for edge routers, 2.9% for core routers, and 0.7% for CES

WEBINAR: CARRIER ETHERNET 2.0

Join Michael Howard and the Metro Ethernet Forum May 29 at noon EDT for Unlocking Revenues with Carrier Ethernet 2.0 Wholesale E-Access, presenting a step-by-step approach for migrating to CE 2.0 E-Access and featuring leading service providers discussing their own experiences with CE 2.0 E-Access services. Attend live or access the replay: http://w.on24.com/r.htm?e=792744&s=1&k=B79E338817FAE5D07EFECD9A16AE630B.

CARRIER 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 (News - Alert), ZTE, and others. To buy the report, contact Infonetics: http://www.infonetics.com/contact.asp.

RELATED REPORT EXCERPTS

• China's huge LTE rollouts and EU network upgrades push carrier capex to $354B this year
• China Mobile increases capital intensity 6% year-over-year
• Networking ports hit $39 billion; 40G booming in the data center, 100G taking off in the core
• SDN and NFV moving from lab to field trials; Operators name top NFV use case

RECENT AND UPCOMING RESEARCH

Download Infonetics' 2014 market research brochure, publication calendar, events brochure, report highlights, tables of contents, and more at http://www.infonetics.com/login.

• Analyst Note: Ericsson-Ciena Deal: P-OTS, SDN, and 100G for Routers
• Analyst Note: SDN-NFV Battleground: Software vPE Router Takes on Hardware Edge Router
• Analyst Note: Router Protocols Upstaged by SDN in Paris
• Carrier Ethernet Equipment Market Size and Forecasts
• Ethernet and IP MPLS VPN Services Market Size and Forecasts
• Global Telecom and Datacom Market Trends and Drivers
• Routing, IP Edge, and Packet-Optical Strategies: Global Service Provider Survey
• Router and Switch Vendor Leadership: Global Service Provider Survey

INFONETICS WEBINARS

Visit https://www.infonetics.com/infonetics-events to register for upcoming webinars, view recent webinars on demand, or learn about sponsoring a webinar.

• Unlocking Revenues with Carrier Ethernet 2.0 Wholesale E-Access (May 29: Attend)
• How to Get the Best Out of DAS, Small Cells, and WiFi (News - Alert) (June 5: Attend)
• Diameter Signaling Control for LTE Networks (June 12: Attend)
• NFV: An Easier Initial Target (News - Alert) Than SDN? (June 19: Attend)
• NFV: The Nitty Gritty (View on-demand)

TO BUY REPORTS, CONTACT:

N. America (West), Asia Pacific: Larry Howard, [email protected], +1 408-583-3335

N. America (East, Midwest), L. America: Scott Coyne, [email protected], +1 408-583-3395

EMEA, India, Singapore: George Stojsavljevic, [email protected], +44 755-488-1623

Japan, South Korea, China, Taiwan: http://www.infonetics.com/contact.asp

ABOUT INFONETICS

Infonetics Research (News - Alert) (www.infonetics.com) is an international market research and consulting firm serving the communications industry since 1990. A leader in defining and tracking emerging and established technologies in all world regions, Infonetics helps clients plan, strategize, and compete effectively. View Infonetics' About Us slides at http://bit.ly/QUrbrV.

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