From the ‘no surprise‘ files:
Infonetics Research is reporting that the global service provider market for routers and switches declined in the first quarter of 2009 by 13 percent on a year over year basis, and 17 percent sequentially. The first quarter numbers are in stark contrast with the figure Infonetics reported for the fourth quarter of 2008 with modest growth of 4 percent on a year over year basis.
Considering that two of the leading carrier router vendors, Juniper and Cisco both have been reporting challenges in their service provider businesses, the Infonetics numbers are hardly a surprise to me.
“Now in the first quarter of 2009, the market is down 13 percent year-over-year, indicating the full effect of operator protective behavior in the thick of the downturn,” Michael Howard, Infonetics Research principal analyst said in a statement. “While the first quarter of every year is typically a down one for the carrier router and switch market, 1Q09 showed the deepest sequential decline in years.”
It’s not all doom and gloom though.
Infonetics reported that the Asia Pacific region actually grew by 11 percent on a year over year basis during 1Q09. As well Howard noted that demands on the carriers are continuing to grow and as such they will have to upgrade their networking gear at some point to satisfy customer demand.
The idea that even in a downturn service providers will eventually have to buy networking equipment is also something I’ve heard repeatedly from Cisco and Juniper. With Cisco’s big CRS-1 recently hitting its fifth anniversary and Juniper ramping up its T1600 sales, it will be interesting to see how the rest of the 2009 shapes up and whether or not CAPEX limitations in fact further restrict routing equipment buys.
Image: Juniper T1600