Service Provider Gear Sales To Hit $10 Billion In 2009: Report

Revenues from IP router and carrier Ethernet switch and router (CESR) sales will grow vigorous over the next four years, as carriers deploy more and more Ethernet at the network backbone, says a new report from Infonetics Research.

Service provider switch and router revenues will rise almost 39%, from $7.2 billion in 2005 to $10 billion in 2009, totaling $43.4 billion over all four years. In the same period, revenues from sales of CESR products alone will more than double, growing from $2.1 billion to $5 billion. Multiservice switch (MSS) sales will continue to decline, however. The MSS share of revenues in the switch and router market has already fallen to 27% from 47% in 2000, and Infonetics expects it to drop to 17% in 2009.

"Service providers are clearly moving toward next gen IP networks, and Ethernet plays a strong growing role in that move" Infonetics principal analyst Michael Howard said in a statement. "It is no surprise that carrier Ethernet switches and routers (CESR) show up big in 4Q05 in our new quarterly report. Providers need carrier-class products; eventually, nearly every service provider IP router will be designed to meet the specifications of CESR products."

While multiservice switch revenues declined 5% last year, dropping from $2.1 billion to $2.0 billion, core and edge router revenues were up 31%, from $4 billion in 2004 to $5.2 billion last year. With a dominant 42% revenue share in the service provider market, Cisco has been the principal beneficiary in the sales upswing. Juniper maintains a strong second-place in the market with a 19% share of revenues.