Virtual Router Sales Set to Double

Not all areas of the global networking market are growing equally, according to a series of new IHS Infonetics reports.

The latest IHS Infonetics global data center network equipment market report for the first quarter of 2015 pegs revenues at $2.6 billion, a 14 percent decline from the fourth quarter of 2014.

One area of networking that is growing, however, is bare metal switching, which represented 12 percent of ports shipped in the first quarter.

“Open networking, which leverages open source software and open hardware designs and allows anyone to innovate, is set to change networking, just as open source changed the server and OS marketplace,” Cliff Grossner, Ph.D., research director for data center, cloud and SDN at IHS, said in a statement.

In terms of the global service provider router and switch market, for the first quarter of 2015, IHS has pegged the market at $3.3 billion in revenue, a 13 percent decline from the fourth quarter of 2014.

IHS Infonetics is now predicting a 2.1 percent compound annual growth rate (CAGR) for the 2014 to 2019 period. While the overall router market is growing slowly, there is one particularly bright spot: virtual routers. IHS is forecasting virtual routers to grow by 125 percent from 2015 to 2016.

“Carriers’ plans to move more services off edge routers and onto NFV servers and to shift more metro and transport functions to packet-optical transport systems (P-OTS) does not mean that router and switch spending will take a sizable downturn over the next five years,” Michael Howard, senior research director for carrier networks at IHS said in a statement. “Rather, revenue will grow slowly,”

IHS also surveyed global carriers on NFV deployment plans and found that in 2015, 35 percent of carriers have plans for NFV deployments.

“Though we’re still in the early stages of a long-term transition to NFV-SDN architected networks, many carriers will be moving from proof-of-concept tests and lab evaluations to commercial deployments of NFV in 2015,” Howard said. “Providers believe that NFV and its SDN (software-defined networking) companion are a fundamental change in telecom network architecture that will deliver benefits in service agility and new revenue, operational efficiencies and capex savings.”

Sean Michael Kerner is a senior editor at Enterprise Networking Planet and Follow him on Twitter @TechJournalist.

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