Virtual Routers to Grow 125% in 2016


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Architectural changes based on virtualization and packet-optical technologies will hold the compound annual growth rate (CAGR) of the worldwide service provider router and switch market to 2.1 percent over the 5 years from 2014 to 2019, according to the latest IHS Infonetics Service Provider Routers and Switches report from IHS.

"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. Rather, revenue will grow slowly," said Michael Howard, senior research director for carrier networks at IHS.

Key report highlights:

  • Virtual routers, or vRouters, made their debut in real-world use cases only in the last few years (for example, Brocade’s Vyatta vRouter)
  • The global vRouter market is in early stages and is forecast by IHS to grow 125% from 2015 to 2016, led by Asia Pacific
  • The global service provider router and switch market totaled $3.3 billion in 1Q15, down 13 percent from the previous quarter, but up 3 percent from a year ago
  • Looking at router and carrier Ethernet switch (CES) revenue by geography in 1Q15, North America, EMEA and Latin America were up year-over-year, while Asia Pacific was down
  • On a 4-quarter rolling average, Alcatel-Lucent, Cisco, Huawei and Juniper (in alphabetical order) were tops in router and CES vendor market share

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