According to ACG Research, the Worldwide Carrier Routing and Switching market decreased quarter over·quarter but increased year over year, 5.1% and 5.9%, respectively. The core·routing segment posted decrease 9.0%·quarter over quarter·but slightly up 0.3% year over year.
Although· there was significant softening in the core space carriers continue to address· upgrade issues. The edge/switching also decreased 4.1% q-q but up 7.4% y-y. The· competition in SP edge market is benefiting from the diversity of applications· and solutions, requirement variations in the regions, cross-technology solutions· and the move to 100GE on routers and 100G in optical transport.
“This decline is in line with what we expected; the traditional capex flush· in Q4 is attributed to the decrease in SP routing and switching spending in· Q1.· We are also seeing a shift in capex spending from wireline to· wireless, and as well as the overall allocation for mobility continuing to· increase,” states Ray Mota, router and switching analyst, ACG Research.
New and innovative services have and will continue to instigate a shift in· networking. Technologies such as SDN and NFV and what gets virtualized and what· stays physical will impact the transition from equipment to software. The key· drivers will be more than just cost on scale and capacity; service velocity and· increasing average profit per user will also drive this move. During that· transition, established technologies such as Carrier Ethernet and 100G will· drive growth in wireline, and LTE and Small Cells will drive growth in· wireless.
Additionally, vendors will need to address the long-term demand for· high-performance and innovative networks and architectures that address· interconnected data centers. Interconnected data center network architectures· are being reconfigured to respond to traffic volumes and changing traffic· patterns. The architectural challenges include cost effectively accommodating· this rapid traffic expansion, delivering network flexibility, and enabling· service innovation.
