Ovum: Global service provider switching and routing sales to hit $15.4B this year

The global service provider switching and routing (SPSR) market may not have gotten off to a good start this year, but should right itself by the end of this year, according to market research and consulting firm Ovum. SPSR sales should grow 4.4% to $15.4 billion this year, according to Ovum’s “Market Share Alert: 1Q12 SP Switching & Routing.”

Global SPSR revenue dropped 16.4% sequentially and 0.2% versus 1Q11 in the first half of 2012, Ovum reports. This is the first time SPSR quarterly revenue has declined from the year-earlier period since 4Q09.

David Krozier, principal analyst, network infrastructure, at Ovum explains, “In 1Q12, annualized revenue growth paused. Declines in the IP/MPLS core and access switch and router segments were nearly balanced out by gains in the IP/MPLS edge and IP/Ethernet product segments.

“The strongest performance in 1Q12 was in the smallest geographic segment, South & Central America (SCA), with sales up 25% from the year-ago quarter. North America (NA) produced 13% growth, while the Asia-Pacific market declined by 0.7% and the EMEA markets fell sharply, by 18.5%,” notes Krozier.

Regional differences proved significant, according to Ovum. Vendors with significant exposure in South & Central America and North America bucked the overall trend in 1Q12 as both markets grew by double digits.

Krozier adds, “Alcatel-Lucent turned in a particularly strong performance in South & Central America in the quarter, while Cisco produced record revenues in North America, and both vendors managed double-digit revenue growth in the Asia-Pacific region to outpace global growth.

“SPSR carrier spending in NA and SCA will remain healthy, and the Asia-Pacific market will pick up as 2012 progresses. While the Southern European economies are a concern, Eastern Europe and MEA provide reasons for optimism in carrier spending in the EMEA region,“ concludes Krozier.