From the SIP Trunking Experts

July 30, 2014

Core Router Market Will Reach $3.4 Billion by 2018

By Joe Rizzo SIP Trunking Report Contributing Writer

In December 2013, market research firm Dell’Oro Group forecast that we would be seeing double digit growth for the service provider core router market in 2014. In Q3 2013, this market grew by seven percent, which was impressive since the previous two years saw declines in the core router market.

A core router is a router designed to operate in the Internet backbone, or what is considered to be the core. In order to fulfill this role, a router must be able to support multiple telecommunications interfaces of the highest speed in use in the core Internet. In addition, it must also be able to forward IP packets at full speed on all of them and it needs to support the routing protocols being used in the core. A core router is distinct from an edge router, which sits at the edge of a backbone network and connects to core routers.

One of the reasons that Dell’Oro was predicting double-digit growth for this year was that all major core routing vendors either already had introduced or soon would introduce new core routing platforms with significantly increased capacity.

This week, we have a newly published report from Dell’Oro concerning the core router market titled “Routers 5-Year Forecast Report.” This publication indicates that the router market is evolving with new bandwidth usage and service delivery scenarios that are reshaping network infrastructures.

As service providers, as well as enterprises rely more on Internet Protocol (IP) networks for their services and operations, equipment manufacturers are developing routers that enable a broader range of services, scale in capacity and support higher data rates.

The fact that the role of routers in these networks is increasing has led manufacturers to include innovative hardware and software features into their new products. All of these core router product upgrades with higher speed ports along with an increase in traffic in the metro area will have the effect of driving the worldwide Service Provider Core Router market to exceed the $3.4 billion mark in the next four years.

According to Dell’Oro, the Service Provider Core Router market is a subset of the Service Provider Router market, as is the Service Provider Edge segment.  Both of these segments have been looked at in the Dell'Oro Group Routers 5-Year Forecast Report.

“With continued growth in IP traffic demand, many Service Providers are coming closer to exhausting Internet backbone capacity and scalability on their aging core router platforms,” said Alam Tamboli, business analyst at Dell'Oro Group. “With recently introduced products that meet these higher capacity needs, Service Providers are likely to perform a product upgrade cycle over the next couple of years after comprehensive testing and trials. Furthermore, the growth of traffic in metro area networks is expected to outpace that of traffic in backbone networks due to a shift in IP traffic patterns related to content delivery networks and data centers. This shift in patterns has caused many Service Providers to install core routers into their metro networks, effectively increasing the total available market to Service Provider Core Routers.”

Edited by Rory J. Thompson
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