WAN Optimization Heats Up

BOSTON -- Worldwide enterprise routerrevenue increased 6% to $1.1 billion between the third and fourth quartersof 2006 and ended the year on a positive note, with annual revenue postingdouble-digit growth, says Infonetics Research in its latest "EnterpriseRouters & WAN Optimization Appliances" report.

Meanwhile, the WAN optimization appliance market is heating up nicely,posting a quarterly gain of 23% between 3Q06 and 4Q06 and an annual gain of37% between 2005 and 2006.

The underlying demand for routers is strong, with unit shipments expected topass the 3 million mark in 2009, but intense competition and price erosionare curbing revenue growth. Still, worldwide revenue is projected to grow13% to $4.8 billion between 2006 and 2009.

"The enterprise router market did well in the fourth quarter, and overallfor the year as well, led by strong mid-range and high-end router sales,"said Infonetics Research analyst Matthias Machowinski. "The WAN optimization segment will be an interesting one to watch over thecoming year--we've already seen an IPO and a number of acquisitions. It'sstill an early market and there should be some serious market share battlesahead."

Infonetics Research Inc.