New research from the Dell'Oro Group indicates that Ethernet Switch and IP router sales will continue to experience substantial growth over the next five years as enterprises upgrade their networks and service providers meet subscriber demand for broadband services.
The Ethernet Switch market will experience the most dramatic growth, with Dell'Oro expecting 2005 revenues to exceed the high-water mark of 2000 and continue to rise from there. Much of this growth is being led by the 10 Gigabit Ethernet market, which Dell'Oro expects to double every year for the next three years. According to Dell'Oro's director of Ethernet research Seamus Crehan, the market will be driven by falling prices and increasing deployments of Gigabit networks.
"As businesses continue to deploy Gigabit Ethernet in their wiring closets, they will need to aggregate that speed to the core of the network," Crehan said in a statement. "We anticipate that the combination of significant declines in the price per 10 Gigabit Ethernet port and the widespread adoption of Gigabit Ethernet-both in the Enterprise and Service Provider networks-should result in very strong growth for 10 Gigabit Ethernet switches."
At the same time, Dell'Oro expects sales of routers to grow steadily over the next five years, to reach $10 billion in revenues by 2009. According to the research firm, the market is being driven by service providers, who will be investing heavily in upgrades to the network core in order to keep up with rising bandwidth demands.
"The growth of the broadband subscriber base is placing tremendous traffic demands on Service Provider core networks, and, as a result, we anticipate that Service Providers will deploy more next generation routers that can handle this increased capacity," Dell'Oro principal analyst of routers research Shin Umeda said in a statement. "The next generation routers, such as the Avici TSR, Cisco CRS-1 and Juniper T640, will provide Service Providers the flexibility to expand their networks more efficiently, while at the same time improving reliability."