WAN Optimization Heats Up

BOSTON -- Worldwide enterprise router
revenue increased 6% to $1.1 billion between the third and fourth quarters
of 2006 and ended the year on a positive note, with annual revenue posting
double-digit growth, says Infonetics Research in its latest "Enterprise
Routers & 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 of
37% between 2005 and 2006.

The underlying demand for routers is strong, with unit shipments expected to
pass the 3 million mark in 2009, but intense competition and price erosion
are curbing revenue growth. Still, worldwide revenue is projected to grow
13% to $4.8 billion between 2006 and 2009.

"The enterprise router market did well in the fourth quarter, and overall
for 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 the
coming year--we've already seen an IPO and a number of acquisitions. It's
still an early market and there should be some serious market share battles
ahead."

Infonetics Research Inc.