Future Of Enterprise Routers Tied To VoIP; Lack Of Standards Hamper Growth

Inconsistent application of industry standards to VoIP equipment by manufacturers is slowing down adoption.

September 8, 2004

1 Min Read
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Despite a 10 percent dip in worldwide demand for enterprise routers between the first and second quarters of the year, analysts at Infonetics expect to see the market return to the 2003 high of $4 billion by 2007.

The demand, say analysts, will be driven by the rapid introduction of more VoIP and security technology into enterprise networks. The establishment of IP-centric enterprises means that routers are not only being used to address traditional data and security issues, but must also be able to handle voice traffic.

The firm says that Cisco continues to dominate the router space, even though it had a soft quarter, accounting for more than 75 percent of enterprise router revenue. In terms of unity market share, Linksys (now part of Cisco) and D-Link continue to battle it out for the lead. Linksys is ahead of D-Link in terms of revenue, but still holds a distant second place position in revenue share compared to Cisco. NETGEAR is the fourth largest player in the space.

Meanwhile, analysts at Heavy Reading say that inconsistent application of industry standards to VoIP equipment by manufacturers is slowing down adoption of that technology. Until standards issues get resolved, both enterprise and service provider networking executives are going to be wary of making big investments. Analysts also concluded that proprietary technologies used by the big manufacturers inhibit competition from smaller, innovative players.

"Incumbent vendors continue to use proprietary technology as a way to keep, customers locked into buying equipment only from them. This strategy essentially locks out competition from smaller, more innovative startups," analysts said in a statement.

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