Gartner Dataquest Says Worldwide Service Provider Router Market Totaled $1.9 Billion in 2002.

Business Editors & High Tech Writers

Symposium/ITxpo 2003

SAN JOSE, Calif.--(BUSINESS WIRE)--Feb. 19, 2003

As service provider routers (SPRs) continue to form the basis for additional telecom services and next-generation infrastructure, the worldwide SPR market totaled $1.9 billion in 2002, according to Dataquest Inc., a unit of Gartner, Inc. (NYSE:IT) and (NYSE:ITB).

The SPR market ended 2002 on a positive note with the core SPR segment reaching $185 million in the fourth quarter. The fourth quarter recovery in the core indicates that the excess capacity may have been utilized and carrier space spending will resume in this market.

Core routers (carrier class backbone routers) were driven by the edge router segment (carrier class edge and aggregation routers which consolidate high-speed Internet traffic and provide IP services), as an increase of traffic in the edge eventually results in more bandwidth requirements in the backbone.

"Overall IP routing market growth is a direct result of new market penetration and a trend toward transformation from existing networks to an IP/MPLS consolidation," said Jennifer Liscom, principal analyst for Gartner Dataquest's worldwide telecommunications and networking group. "Customers as a whole are looking for more than just routing functionality. They're requiring value-added services in addition to complementing their existing platforms and expanding to new technologies."

The top 2 vendors, Cisco Systems and Juniper, accounted for 86.9 percent of all SPR revenue in 2002 (see Table 1). Cisco led the market in 2002, with 59.6 percent of worldwide SPR revenue, followed by Juniper with market share of 27.3 percent.

Table 1
Worldwide Service Provider Router Vendor Revenue Estimates for 2002
(Millions of Dollars)
----------------------------------------------------------------------
Vendor            2002 Vendor Revenue            2002 Market Share (%)
----------------------------------------------------------------------
Cisco                  1,143.4                          59.6
Juniper                  525.0                          27.3
Redback                  105.2                           5.5
Nortel                    51.1                           2.7
Others                    95.0                           4.9
Total                  1,919.8                         100.0
----------------------------------------------------------------------
Source: Gartner Dataquest (February 2003)

Cisco also led the market in terms of shipments, garnering 55.3 percent of the market. Spurred on by its lead in the broadband aggregation segment of the market and a 10 percent increase in the core market in the fourth quarter, Juniper remained in the No. 2 position with 28.7 percent market share (see Table 2).

Table 2
Worldwide Service Provider Router Vendors' Shipments Estimates
 for 2002
(Actual Units)
----------------------------------------------------------------------
Vendor               2002 Shipments              2002 Market Share (%)
----------------------------------------------------------------------
Cisco                    7,747                          55.3
Juniper                  4,027                          28.7
Redback                    892                           6.4
Nortel                     345                           2.4
Others                   1,004                           7.2
Total                   14,015                         100.0
----------------------------------------------------------------------
Source: Gartner Dataquest (February 2003)

"Although the SPR market showed signs of leveling off at the end of 2002, the outlook for the market remains relatively flat in 2003," said Liscom. "Strong sales in edge and broadband aggregation routers will lead to recovery in the core, but recovery for the SPR market is still not expected until early 2004."

Gartner Dataquest defines SPRs as carrier-class routers capable of providing multigigabit bandwidth in support of high-speed WAN interfaces. These carrier class devices are typically designed for installation in network infrastructure and support the Internet Protocol suite.

This analysis is provided by Gartner Dataquest's worldwide Telecommunications and Networking group. This group provides an analysis for the full spectrum of telecom and networking issues. To keep up to date on the latest telecommunications issues, please visit Gartner's Telecommunications Focus Area at www.gartner.com/telecom-mkt. To purchase the report or subscribe to Gartner Dataquest programs, call 408-468-8000 or go to www.gartner.com.

Gartner will provide additional analysis on the Telecommunications industry at Gartner Symposium/ITxpo 2003, to be held March 23-27 at the San Diego Convention Center in San Diego, California. Gartner Symposium/ITxpo is the IT industry's largest and most strategic conference, providing business leaders with a look today at the future of IT. For more details or to register for Gartner Symposium/ITxpo 2003, visit www.gartner.com/us/symposiumwest or call 1-800-778-1997. Members of the media can register for the event by contacting Maria DiMasi at 212-699-2734 or e-mailing [e-mail].

Gartner Dataquest, a unit of Gartner, Inc., is the recognized leader in providing the high technology and financial communities with market intelligence for the semiconductor, computer systems and peripherals, communications, document management, software, and services sectors of the global information technology industry.

Gartner, Inc. is a research and advisory firm that helps more than 10,500 clients leverage technology to achieve business success. Gartner's businesses consist of Research, Consulting, Measurement, Events and Executive Programs. Founded in 1979, Gartner is headquartered in Stamford, Connecticut, and has 4,000 associates, including more than 1,000 research analysts and consultants, in more than 75 locations worldwide. Fiscal 2002 revenue totaled $907 million. For more information, visit www.gartner.com.