Enterprise Router, WAN Optimization Markets Feel Effects of Economy

New research unveiled last week from communications market research firm, Infonetics Research shows that global sales of enterprise routers reached $1.08 billion in the third quarter of 2008. Although this seems like a large amount, revenues are still down 1 percent from the previous quarter, while sales of WAN optimization appliances are up only a mere 1 percent. 

 

The report, “Enterprise Routers and WAN Optimization Appliances”, found that while the WAN optimization market is expected to grow 30 percent in 2008 from 2007, growth is being disrupted by the weakening economic climate.

 

Matthias Machowinski, directing analyst for enterprise voice and data at Infonetics Research (News - Alert), explained, "We have been expecting WAN optimization market growth to slow a bit, as is natural for fast growing early markets, but the global economic crisis is exacerbating the slowdown. Quarterly year-over-year revenue growth has been steadily shrinking, and the fourth quarter outlook provided by Blue Coat and Riverbed (News - Alert) is mixed. The WAN optimization market is still expected to pass the $1 billion mark this year and grow annually during the downturn, just not as quickly as previously forecast."

 

In its study, Infonetics Research also uncovered that spending on enterprise routers is predicted to drop in 2009 and bottom out in 2010, with growth returning in 2011.

 

In addition, 39 percent of third quarter 2008 enterprise router revenue came from North America, while 33 percent was from EMEA, 22 percent from Asia Pacific, and 7 percent from CALA. Emerging economies in Asia are expected to weather the economic storm a little better.

 

Cisco, the major supplier of networking equipment and network management for the Internet, continues to dominate the worldwide enterprise router market, with 85 percent of worldwide revenue in the third quarter of 2008. Juniper Networks holds second place based on its revenue, while China-based telecommunication services provider, Huawei (News - Alert) is third.

 

The report revealed that Blue Coat has taken first place in WAN optimization appliance revenue share thanks to its acquisition of Packeteer. Cisco (News - Alert) is a close second while Riverbed is third.

   

Infonetics' report tracks 3Com/H3C, ADTRAN, Allot, Blue Coat, Cisco, Huawei, Ipanema, Juniper, Nortel, OneAccess (News - Alert), Packeteer, Riverbed, Siemens, and others. The quarterly report features pivot tables and provides market size, market share, forecasts, and analysis for WAN optimization appliances and high-end, mid-range, branch, and low-end/SOHO enterprise routers, including port detail (T1/E1/J1, T3/E3/J3, OC3/STM1, OC12/STM4).

 

Since 1990, Infonetics Research has been providing market research and consulting to the communications industry. A leader in defining and tracking emerging and established technologies in all world regions, Infonetics helps clients plan, strategize, and compete more effectively.