Networking Router advances from Cisco, others, drive spending

August 2010

The worldwide service provider router market is entering a growth cycle that will see revenue increase by more than 60% over the next five years, according to Dell’Oro Group. After a sharp decline in 2009 driven by the global recession [1], the router market is experiencing strong demand as service providers increase the capacity of networks to accommodate growth of Internet traffic [2], the firm states.

Dell’Oro Group forecasts the service provider router market to reach $11.6 billion by 2014. The market stood at about $7.2 billion in 2009, according to Dell’Oro, which projects it to grow to $7.9 billion in 2010.

Reaching $11.6 billion in 2014 represents a compound annual growth rate of 10%.

Recent history shows that service providers invest heavily in IP routers in conjunction with advances in router technologies, according to Dell’Oro. Cisco recently introduced the CRS-3 [3] and Juniper recently unveiled a chipset, available in early 2011, to enable its T series routers to achieve 250Gbps per slot [4]. And they, along with Alcatel-Lucent, [5] also unveiled 100G Ethernet interfaces for their routers.

“We are seeing manufacturers offering unprecedented advancements in capacity and service functionality in their latest router products,” said Shin Umeda, vice president of routers research at Dell’Oro, in a statement. “These new capabilities will give service providers the tools to better manage network traffic growth and develop new revenue streams.”  For themselves and their vendors.