By Susan Fogarty, On-line Editor
Study results released from market research firm Ryan Hankin Kent Inc. (RHK--South San Francisco, CA) show Lucent Technologies (Murray Hill, NJ) and Cisco Systems Inc. (San Jose, CA) leading the market, both in terms of of revenue and units shipped during the first half of 1999. The firm published two studies last week: Core Switch and Router Market Share--First Half, 1999, covering the market for core devices, and Edge Switch and Router Market Share--First Half, 1999, examining the market for edge devices.
Results show the core device market reached $407 million in the first half of 1999. Cisco leads the core device market with a 46% market share based on revenue, and a 59% share based on units. The core Asynchronous Transfer Mode (ATM) switch market, on the other hand, is led by Lucent with a 66% revenue share and 65% unit share. In the core Internet Protocol (IP) router market space, RHK finds new entrant Juniper Networks (Mountain View, CA) has built a significant presence in the past six months, capturing 13% of the revenues for IP routers and 8% of units. Although Cisco retains its sizeable market share of 87% of revenues, it has experienced a decline from its 1998 position of 98%.
The edge device market reached $1.44 billion in the same time period, with Cisco and Lucent battling for the lead. Measured in revenues, Cisco's market share was 31%, versus 28% for Lucent. The two companies were in a dead heat, however, each with 36% of the market, when results were measured in units shipped. Newbridge Networks Ltd. (Kanata, ON, Canada) finished with a strong 26% of revenues, but lagged far behind in units with only 10%. Nortel (Brampton, ON, Canada) took a 12% revenue share, with 14% of units, while FORE Systems Inc. (Pittsburgh, PA) held onto 3% of the revenue and 4% of units shipped.
In previous market share studies produced by RHK, total carrier ATM switch revenue or core IP router revenue determined the market. Due to the emergence of multiprotocol edge devices, RHK now tracks market share by function rather than protocol. "RHK will also continue to distinguish between routers and switches as long as the products and corresponding markets remain distinct," says Joe Skorupa, director of switching and routing at RHK. Edge and core markets are monitored separately because of differences in functionality. "Core devices are optimized for high-speed traffic forwarding, while edge devices aggregate traffic and provide advanced services," says Tracey Vanik, director of edge switching and routing.
RHK defines a core device as a product that lives at the center of the network and performs high-speed forwarding. RHK includes those core network elements (IP or ATM) that have at least 20 Gbps in full duplex port capacity, are non-blocking at this capacity, and support multiple OC-48 interfaces. The edge device market includes IP routers, ATM and multiprotocol switches, and IP services systems at the edge of the public network.