Vendors battle for market leadership at the network edge
San Francisco-based telecommunications market research firm RHK released the initial study for its Edge Switching and Routing Service, indicating the edge-device market reached $1.44 billion in the first half of 1999, with Cisco Systems and Lucent Technologies battling for the lead position. According to the report, "Edge Switch and Router Market Share-First Half, 1999," Cisco's market share was 31% versus 28% for Lucent measured in revenues.
Lucent and Cisco, however, were in a dead heat, each with 36% of the market, when the results were measured in units shipped. In revenues, Newbridge Networks also finished strong with 26%, but lagged well behind in units with only 10%. The study details the combined market for edge Internet-protocol (IP) routers, Asynchronous Transfer Mode switches, and multiprotocol edge switches.
Edge devices are defined in the report as being positioned at the periphery of the network and concentrate lines. They perform traffic marking, policing, and protocol interworking and provide and deliver IP services. Edge devices typically possess no more than 20 Gbits/sec of usable bandwidth and are considered central-office equipment. Edge devices are further segmented into aggregators and IP-services systems.
Core devices are covered in a separate study, says RHK, and due to the growth in market size and evolution of switching and routing products, it has become important to track developments in the core and edge segments separately. Core devices are optimized for high-speed traffic forwarding, while edge devices aggregate traffic and provide advanced services.
Other edge-device market players in RHK's study include Nortel Networks with a 12% revenue share, with 14% of units, and FORE Systems holding onto 3% of the revenue and 4% of units shipped. Although a relatively small number of vendors offered aggregators for the edge market in the first half of 1999, the second half of the year promises a very different picture, says RHK. New-generation aggregators from Ascend Communications, Cisco, Nortel, and new entrant Unisphere promise to upset the apple cart. Volume shipping of IP-services systems is also expected to reshape the market at the network edge.
RHK's report examines revenue and units, shipments, and primary customer relationships. For more information, contact Mike Mahan at (650) 737-9600 ext. 233, or visit the company's Website at www.rhk.com.