CESR Sales Crack $500M
CESR sales reached $508 million, the report says -- a 6 percent increase from the previous quarter and a 25 percent increase from last year's third quarter.
That growth is expected to continue, at a compound annual rate of 25 percent from 2006 to 2010, at which point the market should measure $3.76 billion, writes Heavy Reading analyst and resident Ethernet enthusiast, Stan Hubbard, in the report.
That demand for CESR platforms is being driven "by the fastest growing services in the wireline market," Hubbard writes in an email to Light Reading. "These include Ethernet business services, Ethernet access to Layer 3 VPN services, consumer IPTV/VOD services, and mobile traffic backhaul services."
Enterprise-related CESR equipment accounted for 47 percent of sales, while equipment used for IPTV and video-on-demand deployments made up 43 percent.
Wireless backhaul represented just 4 percent of sales for the quarter, despite being such a hot topic in Ethernet circles lately. (See Ethernet Backhaul Battle Brews.)
But back to that enterprise point. Hubbard's email points out three key factors there:
"Large and small operators alike ramped sales, marketing, and network investments related to business services; the MEF accelerated its Ethernet services certification program; and enterprises have grown more aware of the convergence and cost benefits associated with high-performance Ethernet business services," he writes.
Enterprise infrastructure is expected to continue leading other applications for CESR platforms. But CESR platforms will be increasingly be used in converged enterprise and residential networks, as "business and consumer services will be delivered over the same type of network platform within individual operators," Hubbard writes.
Separately, Provider Backbone Transport (PBT, or PBB-TE) and Provider Backbone Bridging (PBB) continue to gain ground in an MPLS/VPLS-dominated world.
"More than half of operator professionals surveyed in mid-2007 by Heavy Reading said they expect their employer to deploy PBB-TE-ready access platforms within the next several years. And PBB-TE/PBT reportedly is working its way into more carrier RFIs/RFPs," Hubbard writes.
That has given a slight boost to PBT flag-waver Nortel Networks Ltd. , which saw its revenues rise 19 percent from the previous quarter. But Hubbard believes that PBT hasn't yet reached widespread carrier approval.
"PBB-TE/PBT proponents like Nortel had fabulous success in generating buzz in 2007, but they really need to deliver in 2008 to silence the naysayers," Hubbard writes. "The PBB-TE folks need another two or three Tier 1 carriers to put their stamp of approval on the technology. They also need to develop and market a PBB-TE-based multipoint-to-multipoint solution to compete against VPLS."
Hammerhead is among the companies trying to address multipoint-to-multipoint, also known as E-LAN, in PBT networks. Nortel says it's got a multicast answer in the works as well. (See Hammerhead Unveils PBT Smarts.)
For more information on the Carrier Ethernet Switch/Router Quarterly Market Tracker, click here.
— Ryan Lawler, Reporter, Light Reading