WAN optimization sales are on a steady upswing, with sales growing 23% between the third and fourth quarters of 2006 and jumping 37% between 2005 and 2006, according to recent studies by Infonetics Research.
With Expand, Juniper, Packeteer and Riverbed leading the pack, the WAN optimization market is poised for further growth as vendors continue to make competitive moves.
"The WAN optimization segment will be an interesting one to watch over the coming year -- we've already seen an IPO and a number of acquisitions," said Infonetics Research analyst Matthias Machowinski. "It's still an early market, and there should be some serious market share battles ahead."
The Infonetics report, "Enterprise Routers & WAN Optimization Appliances," also looked at enterprise router sales, which Infonetics said grew 6% in revenue to $1.1 billion between the third and fourth quarters of 2006. Annual enterprise router revenue saw double-digit growth.
According to Infonetics, router demand remains strong, with unit shipments expected to surpass the 3 million mark in 2009. Intense competition and price erosion will curb revenue growth, however. Nevertheless, Infonetics projects worldwide router revenue to grow 13% to $4.8 billion between 2006 and 2009.
"The enterprise router market did well in the fourth quarter, and overall for the year as well, led by strong midrange and high-end router sales," Machowinski noted.
The report stated that enterprise router port shipments totaled $6.1 billion last year. Cisco Systems held its massive lead in the enterprise router market, with a 75% share of worldwide revenue, led by strong high-end router sales. Huawei ranked second and Juniper third among router vendors. Infonetics said 49% of enterprise router revenue in 2006 came from high-end routers, while 46% was from midrange and 6% from low-end.
Cisco also made great strides in switch sales in 2006, with Infonetics noting that it passed $10 billion in enterprise switch sales.
Overall, Ethernet switch revenue grew 3% to $4.3 billion worldwide between 2006's third and fourth quarters. Annual worldwide Ethernet switch sales are expected to grow 20% between 2006 and 2009, from $15.6 billion to $18.6 billion.
"It was a good year for enterprise Ethernet switch manufacturers, with revenue growth picking up again and the market growing in the double digits," Machowinski said. "There were a few notable highlights in 2006: Cisco passed the $10 billion revenue mark, shipments of 10G ports almost doubled, and both PoE and 1G port shipments increased almost 50%. The next big segment to watch is 1G PoE."
Machowinski said that worldwide Ethernet switch port shipments were up 17% from 2005 to 2006. While worldwide 10/100 switch revenue fell short, port shipments grew 11%.
Annual worldwide application switch revenue broke double-digit growth again, though the market's growth rate slowed.
Cisco holds 54% of worldwide port share in the Layer 2 managed configuration segment, followed by Huawei, which has 13%. In the Layer 3 segment, however, the gap is smaller. Cisco leads with 24% port share, but HP ProCurve Networking is just three points behind.
In unmanaged fixed configuration switches, D-Link is first in worldwide revenue and second in port shipments; Netgear is first in port shipments and second in revenue.