2Q14 Worldwide Enterprise Router Revenue Reported at $867 Million

Global networking switch and router markets show mixed Q2 2014 results, while NFV shows promise.

By Sean Michael Kerner | Posted Sep 8, 2014
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The current state of the router and switching networking market depends on which segment you look at.

According to Infonetics Research, for the second quarter of 2014, global enterprise router revenue reached $867 million, 2Q14 infoneticsrepresenting a nine percent year-over-year decline.

"For the second quarter in a row, enterprise router sales disappointed, and revenue is now trending downward," Matthias Machowinski, directing analyst for enterprise networks and video at Infonetics Research, said in a statement. "Demand for routers is still strong, as indicated by rising unit shipments, but discount pressure, preferences for local and lower-cost vendors in China and lower public sector sales drove down revenue."

Looking specifically at the global Layer 2-3 Ethernet switch market, analyst firm Dell'Oro reported solid second quarter revenue of $5.6 billion.

"The Ethernet switch market remains robust, with many strong growth engines in place for the next year," said Alan Weckel, vice president of Ethernet switch market research at Dell’Oro Group. "While the data center remains the strongest segment for growth, a number of unique trends are occurring, as Chinese vendors such as Huawei and ZTE expand and many other vendors refocus on distinct parts of the switching market."

Service provider routing and switching revenue

Looking specifically at service provider router and switch revenue, Infonetics Research also saw a yearly decline. For 2Q14, Infonetics reported global service provider router and switch revenue, including IP edge and core routers and carrier Ethernet switches (CES), at $3.9 billion, a 4 percent year-over-year decline.

Infonetics also surveyed service providers about their Network Function Virtualization (NFV) efforts. 59 percent of service providers are evaluating or considering NFV, while only 15 percent are currently deploying NFV or have NFV trials.

"The move to SDN and NFV will change the way operators make equipment purchasing decisions, placing a greater focus on software," Michael Howard, Infonetics Research’s co-founder and principal analyst for carrier networks, said in a statement. "Though hardware will always be required, its functions will be refined, and the agility of services and operations will be driven by software."

Sean Michael Kerner is a senior editor at EnterpriseNetworkingPlanet and InternetNews.com. Follow him on Twitter @TechJournalist.

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