Edge router market invites more players

Three trends are driving the edge router market: IP TV, carrier Ethernet and multiservice networking.

These are also the reasons that the edge router market is expected to grow 21% this year to just less than $3.2 billion, the same rate of growth for 2005, according to the Dell'Oro Group.

Edge routing is crucial in IP TV for Ethernet and broadband aggregation, and IP services delivery. Ethernet and broadband aggregation routers collect thousands of Ethernet and DSL access feeds from subscribers for connection to IP TV content.

IP service edge routers personalize those connections by identifying the subscriber and implementing video subscription policies and preferences to the user/content interaction.

Click to see: The multiservice market

"Video is such a big bandwidth sucker that it's really forced [carriers] out of a mind-set of incremental change to their networks, to network transformation in the aggregation and transport areas," says Mark Seery, vice president of IP service infrastructure research at RHK/Ovum.

This is where Alcatel has made the most inroads in edge routing. AT&T chose Alcatel as a supplier and integrator for the carrier's Project Lightspeed fiber-to-the-node buildout, which will support IP TV and other broadband applications.

Alcatel's share of the IP-aggregation segment in edge routing rose from 9.2% in the second quarter of 2005 to 25.6% in the fourth quarter, according to Synergy Research, caused largely by Project Lightspeed and other IP TV buildouts.

Ethernet service delivery to enterprises is another key growth niche for edge routers. According to Infonetics Research, worldwide Ethernet service revenue was up 132% to $5.9 billion in 2005 and is expected to jump 280% between 2005 and 2009.

That will spur plenty of sales. Infonetics now tracks a new segment of service provider product specifically for Ethernet service delivery and aggregation applications: the carrier Ethernet switch router (CESR).

CESR sales are expected to more than double to $5 billion from 2005 to 2009, as carriers become increasingly reliant on Ethernet to transport IP traffic in their networks, according to Infonetics.

"What we're seeing there is the desire from a customer standpoint to do more than just plain-Jane best-effort Ethernet," says Mike O'Malley, group manager of portfolio marketing at Tellabs. "The realization is that I want to differentiate my Ethernet offering with the same type of [service-level agreements] that I can offer today on ATM in order to capture that additional price premium from . . . quality of service guarantees."

But the forte of Tellabs' 8800 multiservice router is just that - multiservice routing. Multiservice routing entails aggregation and provisioning of multiple Layer 2 data services - Ethernet, frame relay, ATM and private line - for enterprise service transport or delivery over an IP/MPLS core.

The selling point for carriers is that they can consolidate multiple overlay networks, each dedicated to one service, into a single converged network supporting multiple services. Not only is this easier for a service provider to manage, but it reduces capital and operating expenditures - money that could reduce the cost of telecom services for enterprises or be invested back into the carrier network for additional service rollouts.

The Tellabs 8800 is a key component of Verizon Business' (the former MCI) Converged Packet Access edge architecture.