Study sees new communication technologies triggering demand for LAN/WAN test equipment

August 15, 2005 Palo Alto, CA -- Phenomenal growth in the number of next-generation communication technologies since 2002 has generated a parallel demand for LAN/WAN test equipment, says a report by Frost & Sullivan. The analysis reveals that revenues in the market for such equipment totaled $731.8 million in 2004, and are projected to reach $1,155.6 million by 2011.

Aug 15th, 2005

August 15, 2005 Palo Alto, CA -- Phenomenal growth in the number of next-generation communication technologies since 2002 has generated a parallel demand for LAN/WAN test equipment, says a report by Frost & Sullivan. The analysis reveals that revenues in the market for such equipment totaled $731.8 million in 2004, and are projected to reach $1,155.6 million by 2011.

The report says that technologies such as Gigabit Ethernet (GbE), 10-GbE, and VoIP have created lucrative markets for LAN/WAN test equipment vendors, with 10-GbE optical products representing the most lucrative technology. The firm observes that while the benefits of the new technologies come with associated deployment complications, all such issues ultimately serve to boost demand for LAN/WAN test equipment. The report notes that LAN/WAN vendors must take advantage of the new technologies' novelty now, before their test equipment becomes available on the "gray market."

"Even with such a remarkable market growth, demand for traditional protocols is declining," notes Sujan Sami, a research analyst at Frost & Sullivan. "Most vendors are combining protocol analyzers with performance analyzers and creating a single solution."

The report says that a consistent need to upgrade and expand existing networks has countered this decline in demand for traditional protocol analyzers, while boosting revenues in the LAN/WAN test equipment markets. The report also notes the continued popularity of wireless LAN networks among private enterprises, despite these companies' reduced IT spending.

"As more private enterprises switch to WLAN networks, the demand for LAN/WAN test equipment is likely to increase," maintains Ayshwarya Deepak, another research analyst at Frost & Sullivan. "The volume of business services delivered on LAN/WAN is increasing, and this has a positive impact on market growth."

The report concludes that, with the market for test equipment growing rapidly, especially in the Asia Pacific region, top tier market participants can expect stiff competition from local and regional vendors seeking to establish themselves.

"Vendors can gain a toehold in the Asia Pacific region either directly, or through alliances with the local vendors," notes Sujan. "They need to be fiercely competitive to stabilize their presence in this market."

The report, "World LAN/WAN Test Equipment Markets," gives an overview of the market through product, geographic, and end-user analyses. The report segments the markets into protocol analyzers, performance analyzers, stress testers, and conformance test system. It also provides information on growth trends, competitive structure, and market opportunities.

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