Despite 2001's 11 percent drop in the switching and routing market, edge IP aggregation routers will hold a positive growth, reaching some $2.4 billion this year, a study says.
The Switching & Routing Forecast Report from RHK Inc. says the market dipped from $7.8 billion in 2000 to $6.9 billion in 2001. The company cites service provider bankruptcies and consolidation, reduced IT spending and over-production leading to excess inventories for the downturn.
Likewise, Internet traffic isn't growing as fast. "While the amount of Internet traffic continues to grow, the rate of growth has slowed down, leaving newly installed equipment underutilized," says Rosalyn Roseboro, senior analyst in switching and routing.
The good news: The extra capacity should be absorbed during the next 12 months to 18 months, RHK says, with a modest growth in 2002. Demand for high-speed access and data services will drive the growth.
Edge IP aggregation routers have seen the dip, however. Extranets, managed hosting and other applications are propelling a demand for higher speed connections, RHK says. "We find that growth in IP aggregation routers is closely correlated to the growth in demand for higher-speed access," Roseboro says. Moreover, "These routers will be used to deliver value-added services, such as IP-VPNs."
The telecom research firm includes in the report shipments for core IP routers and ATM multiservice switches, edge IP aggregation routers, session management systems and service creation systems. It does not include enterprise management systems, RHK says.