According to a new report from Infonetics Research, the global market revenues for service provider routers and switches was $9.6 billion in 2006, a 33 percent increase over the $7.2 billion recorded in 2005. Ethernet and IP are among the driving factors for the continued growth which is expected to continue unabated until at least 2010.
As Ethernet grows, ATM (Asynchronous Transfer Mode) (define) switches continue to decline. For 2006, Infonetics reported that ATM switch revenues dropped 33 percent from 2005 levels, down to $1.3 billion. The ATM market has slid for the past five years from a high of almost $5 billion in 2000 for switch revenues.
Though the move from ATM to Ethernet and IP represents a portion of the growth in the worldwide service provider router and switch revenue, Michael Howard, principal analyst and co-founder of Infonetics Research explained to internetnews.com that deployments are a mix of several factors.
"Router growth is closely aligned with network bandwidth usage growth in general, and we're all using networks in our work, home, and play. Video traffic is causing very noticeable jumps in bandwidth, and this will only get stronger in the future," Howard said.
The growth of broadband in particular is also fueling the move to Ethernet. Howard explained that broadband, whether DSL, cable, or fiber uses Ethernet and IP to aggregate the traffic.
Additionally, Howard noted that many service providers around the globe have IP Transformation Projects in motion, which means that they are moving toward all-IP based data networks, and routers and Carrier Ethernet Switches (CES) are at the heart of these network changes.