DEMAND FOR COMMUNICATIONS THE DRIVING FORCE BEHIND STAND ALONE BRIDGES AND ROUTERS.

LONDON--(BUSINESS WIRE)--An explosion in the demand for communications, driven by the widespread moves towards distributed processing, down- sizing and client server computing, has led to increased usage of smaller systems located closer to users, but still requiring access to information and other resources remotely.

According to a new report by international market research publisher Frost & Sullivan, the European market for stand alone bridges and routers was estimated to have been worth $721 million in supplier's revenue in 1993, up 69 per cent from its 1992 value of $426 million, and is predicted to reach $2.69 billion by the end of the period under review in 1997.

The nineteen suppliers profiled by the report together accounted for world-wide sales of approximately $1.5 billion in 1992 for stand alone bridges and routers.

With the intelligent LAN hub suppliers, studied at the same time, they had world-wide network hardware and software business of around $12 billion in the same year.

Frost & Sullivan reports: "Bridges and routers are essential components for building large networks, whether within a building or between sites. They connect network segments, enabling traffic to pass between them as required, while providing isolation for reasons of management, performance and security."

The product market is dominated by high end routers - now meeting new competition in the form of ATM backbone switches from hub and multiplexer manufacturers, plus new entrants - estimated to have been worth $267 million in 1993 and predicted to reach $758 million by 1998.

This is followed by the market for mid range routers, where demand will hold up well despite price pressure with steady growth of 50 or 60 per cent through 1995.

The report says: "The complexity and variety of routing protocols are likely to remain through 1996, making it difficult to sell and support a router as a commodity product, even if the unit prices halve."

Fastest growth, however, is predicted to be experienced in the market for low end routers and remote access devices, reflecting growth in networking to remote sites and demand for remote access routing.

Product requirements are still being optimised to meet access needs, and have not yet been standardised, leaving room for innovation.

The market for bridges, valued at $144 million in 1993 and predicted to grow steadily at a rate of 15 per cent a year to reach $251 million by the end of the study period are expected to experience a decline in market share, as bridge-routers fall in cost to meet bridges, and as more complex networks require extra functionality.

The UK is the dominant national market, accounting for 23 per cent of the current overall market. This exceeds Germany and France, valued at 20 per cent and 17 per cent respectively.

Frost & Sullivan concludes: "Overall the market is segmented. There are niches, such as remote token ring bridges, ISDN routers and frame relay support that may have at most three serious contenders." "Although the leaders claim to meet all requirements, in practice they may not always be aware of opportunities or indeed competition in such specialist areas."

Frost & Sullivan is an international high-technology research firm. All Frost & Sullivan reports are based on extensive interviews with marketing and technical experts from selected companies in each market segment. Primary research is validated by thorough analysis of available secondary research. Frost & Sullivan is the leading publisher worldwide of high-technology research reports.

Code: 1825-74 Publication Date: 1994 Price: $2750

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