“Many carriers are letting emotions get in the way of fundamentals regarding the economy. "
- Ray Mota, Managing Partner
Gilbert, Arizona (PRWEB) November 14, 2011
Concerns over the high level of global government debt, especially in Europe and slower economic growth in the US, Europe and emerging countries, which may stumble into a recession, are impacting the Worldwide Carrier Routing & Switching markets. The global market decreased 4.3% sequentially and grew slightly 1.8% year over year, according to ACG Research. The Total Worldwide Carrier Routing & Switching market grew revenue $2.8B in Q3/11. Core Routing revenues were down 3.9% q/q but up 4.2% y/y. Edge Routing and Switching revenues were down 4.4% q/q but up 1.1% y/y.
With 54.5% of the total market share, Cisco, the market leader, is capitalizing on the trend of its customers simplifying the way their networks work and how next-generation Internet can be more visual, mobile and virtual. The company has posted 3.9% growth in edge routing, largely attributed to successful ASR 9000 momentum. Juniper holds the number two spot with 18.1% and continues to gain traction with its strategy of capitalizing on mobile, Internet and cloud computing and solutions portfolio. Alcatel-Lucent, which is benefiting from the market momentum for 100G IP/optical as well as providers replacing and leveraging 100GE and IPv6 transition technologies has 16.5% of the total market share.
According to Ray Mota, managing partner, “Many carriers are letting emotions get in the way of fundamentals regarding the economy. Carriers need to understand that volatility in markets is normal, and they must understand what is driving the volatility in order to make sound investment decision for expansion of networks or development of new services.” They need to control emotions and look at economic fundamentals, for example, the US GDP grew 2.5% in Q3, the UK grew 0.5%, and India grew 7.7%. So, focus on fundamentals, allow expansion and promote cautious growth by controlling cost on the operational side and expanding into new services related to enterprise-productive services, such as mobility and video/CDN experience enhancements.”
QUARTERLY TREND and DRIVER HIGHLIGHTS
- Open Internet: The US senate just voted to block a resolution that would disapprove the FCC Open Internet order. This move is a victory for the over-the-top (OTT) operators such as Google, Amazon, and Netflix. Network operators should continue to be innovative regardless of this ruling and figure out ways to create more value without net neutrality violations for the OTT market.
- Ethernet continues to move beyond the metro, and we are seeing providers offer Ethernet services nationally and globally and with consistent class of service and end-to-end service level agreements. However, some service providers still struggle with how to differentiate their services. We suggest they focus on two areas related to this concern: 1) design and deliver personalization and solutions offering instead of just products and 2) focus on while maintaining simplicity.
- With IT spending on cloud services projected to increase 300% to $42B by 2015, cloud continues to be the driving force in the market, and vendors are taking a focused approach and targeting technologies for the next-generation infrastructure and data center evolution.
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Vendor___________Rank______Market Share ($)_____Q-Q MS Point +/-
Tellabs___________4____________ 2.8%___________ -0.4
Huawei___________5____________ 1.9%____________ -1.4
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