Cisco Dominates in Routers as Juniper, Nortel Gain

Networking giant Cisco continues to lead the booming global router and switch market by a wide margin, although rivals Juniper and Nortel are making inroads, according to a new study.

In its latest report, Synergy Research Group found that third-quarter 2007 revenues for routers totaled just over $3.3 billion — a 21 percent gain over the third quarter of 2006. Service provider routers raked in the majority of the revenue at $2.4 billion for third quarter, marking a 29 percent gain over the same period in 2006.

Synergy pegged Cisco as the overall leader with a 66.1 percent market share and third-quarter revenues of just over $2 billion. Though Cisco leads, Juniper and Nortel also made gains in the quarter.

Ray Mota, Synergy’s chief strategist and author of the report, said he had been surprised by Juniper’s growth, especially its 16 percent gain in core routing compared to last quarter.

Juniper also did particularly well in the Carrier Ethernet router segment. According to the Synergy Research report, Juniper gained share 1.7 percent share in 3Q07 in the Carrier Ethernet market. In contrast, Cisco’s Carrier Ethernet share grew by only 0.6 percent while Alcatel-Lucent lost 3.7 percent of it share in the space.

“Juniper just had a great quarter, period,” Mota said. “And they are getting great penetration with their MX-960 product.”

In terms of revenues in the service provider segment, Nortel led the pack for growth with an 80 percent gain in the third quarter of 2007 over the second quarter of 2007.

Though Nortel posted the largest percentage growth, Synergy reported the dollar figure totaled only approximately $11.6 million, still a far cry from the $1.4 billion that Cisco reported for service provider router revenues during third quarter.

Not surprisingly, Cisco spokespeople seemed pleased about the study’s conclusions.

“We agree completely with Synergy’s findings, which show that we and Juniper both gained share in the quarter while Alcatel lost share, and that we continue to lead the market in each tracked segment,” Cisco spokesperson Wilson Craig told

Mota explained to that although Alcatel-Lucent’s revenue from service providers declined 6 percent from last quarter, that portion of the company’s business still remains up by 49 percent on a year-over-year basis.

“Don’t just focus on the down 6 percent sequentially, since they had a great Q2,” Mota said. “I actually expected Q3 to be slightly down for them.”

For the final quarter of 2007, Mota expects that Alcatel-Lucent will perform better, as should most vendors, since fourth quarter is likely to produce a seasonal uptick.

“But many of these vendors need to make sure they continue to expand their geographic coverage in case the U.S. economy and service provider [capital expenditure] continues to be weak,” he added.

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