According to a new report from Infonetics Research, the market for Service Provider routers and switches continued to grow at a double-digit pace in 2010. The company reports that the carrier Ethernet switch and IP router market was worth $12.8 billion in 2010 — a 20.5 percent increase over the 2009 tally.
With the continued growth has also come a change in the relative market positions of the top three vendors. Cisco continues to lead the market, though Infonetics now sees Alcatel-Lucent in the number two spot ahead of Juniper Networks.
“Alcatel-Lucent has been steadily taking IP router market share for the past three years, to the point that, even though they only play in the edge router segment, they are now number two worldwide in the total IP edge and core router market,” Michael Howard, co-founder and principal analyst for carrier and data center networks at Infonetics Research said in a statement. “ALU had its best-ever quarter in IP edge routers, with revenue up 56 percent sequentially in the fourth quarter of 2010, pushing them above Juniper, which also posted solid growth.”
The jump in Alcatel-Lucent’s position is no surprise to the networking vendor.
“This is completely in line with our expectations,” Lindsay Newell, vice-president of marketing for Alcatel-Lucent’s IP activities, told InternetNews.com. “This is the result of many years of increasing traction in the market place.”
Newell noted that the biggest contributors to Alcatel-Lucent’s growth in the service provider market are the 7750 Service Router and 7705 Service Aggregation Router. The 7750 Service Router is powered by a 100-gigabit-per-second silicon chipset called the FP2. The 7750 is now also set to support a 100 Gigabit Ethernet (100 GbE) module as demand for the next generation of networking speeds begins to ramp up.
In terms of why demand of routers is growing, Newell sees one key driver:
“This is primarily due to the rapid growth of mobile data traffic, driving massive demand for mobile backhaul as well as the need for the improved economics and reliability of IP/Ethernet over fiber compared to legacy copper-based TDM circuits,” Newell said.
Juniper Networks is also seeing demand and growth, and isn’t too worried about Alcatel-Lucent’s gains.
“We know that our business is strong with service providers,” Luc Ceuppens, vice president for product marketing, Juniper Networks told InternetNews.com. “There may be a few market segments where we don’t play as much as Alcatel-Lucent and that may have influenced the overall position.”
Ceuppens noted that mobile backhaul is one particular area where Alcatel-Lucent is very strong, whereas that’s a market that Juniper is just getting into. He added that Juniper is growing its universal edge market position, which includes the MX 3D router. Juniper is also ramping up with its next generation core router: the T4000, a 4 Terabit per second router announced in November of 2010.