Carriers are experiencing "SDN hesitation," becoming more cautious in their spending in the face of technology transformation, according to a report from Infonetics Research.
The "enormity" of the coming SDN and NFV transformation is slowing carriers down. Global service provider router and switch revenue increased only 2% year-over-year in the first quarter of 2014, down 14% in sequential quarters, the research company said. (See Defining SDN & NFV.)
The total size of the carrier router and switch market was $3.2 billion in the first quarter. It includes IP edge and core routers and carrier Ethernet switches.
"We believe the current generation of high-capacity edge and core routers can be nursed along" as each service provider works out "the detailed steps of the SDN-NFV transformation," Infonetics co-founder Michael Howard said in a press release. Carriers making these plans include AT&T, BT, Deutsche Telekom, Telefónica, NTT, China Telecom, and China Mobile. Carriers are also looking at content delivery networks and smart traffic management to allow routers and optical gear to cooperate more closely.
Other highlights from the report:
- All major geographical regions are down from the prior quarter. This includes North America, EMEA, APAC, and CALA. All but North America are up year-over-year.
- Juniper gained position in the router and Carrier Ethernet switch market, moving from third-ranked to second by revenue. Alcatel-Lucent also gained, rising to third. Huawei dropped to fourth place.
- The top-ranked router and carrier Ethernet switch vendor? Cisco, of course.
- "Infonetics is projecting five-year (2013–2018) CAGRs of 4.3% for edge routers, 2.9% for core routers, and 0.7% for Carrier Ethernet switches," the researchers say.
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Want to learn more about SDN and the transport network? Check out the agenda for Light Reading's Big Telecom Event (BTE), which will take place on June 17 and 18 at the Sheraton Chicago Hotel and Towers. The event combines the educational power of interactive conference sessions devised and hosted by Heavy Reading's experienced industry analysts with multi-vendor interoperability and proof-of-concept networking and application showcases. For more on the event, the topics, and the stellar service provider speaker lineup, see Telecommunication Luminaries to Discuss the Hottest Industry Trends at Light Reading's Big Telecom Event in June.