Driving the market are IP TV, carrier Ethernet and multiservice networking.
Driving the edge router market are IP TV, carrier Ethernet and multiservice networking, and the market is expected to grow 21% this year, according to the Dell’Oro Group.
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.
“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.
Another application where the Tellabs 8800 is finding traction is wireless aggregation and backhaul – the practice of taking traffic beyond its destination and then back to it in order to reduce expense or accommodate changing transmission patterns. As more users access content from their handheld devices, PDAs and cell phones, wireless becomes just another access technology to support at the edge for transport and delivery of content through the core.
Infonetics says wireless backhaul will be one of the hottest market segments over the next five years. The firm recently surveyed 29 incumbent local exchange carriers, interexchange carriers, ISPs and competitive LECs. More than 50% offer mobile voice and data services, and of these 73% build their own transport network to do the backhauling.
This was one of the factors that prompted Nortel to exit the multiservice interworking market for its MPE 9000 edge routing in favor of wireless backhaul and VoIP. Another factor was that Nortel, by its own admission, is not a leading vendor in the carrier data service market.
Redback is one, though, specifically in DSL/broadband aggregation. The company’s revenue in edge routers ranging from 2.5Gbps per slot to 10Gbps per slot more than doubled from 2004 to 2005, from $44.9 million to $91.9 million, Dell’Oro says.
Redback says customers are now looking at the company’s SmartEdge routers for more than broadband aggregation.
“Everyone, without exception, is building or at least thinking of deploying a new IP edge network that supports multiple services at a single IP edge,” says Marco Wanders, chief marketing officer at Redback. “The way that routers need to handle traffic is fundamentally different than what it used to be. Routers have always been designed to do either business services or a single consumer service [such as] Internet access. Right now, routers need to be supporting multiple services at the same time.”
A key component of enabling multiple services from a single IP edge architecture is virtual routing, Wanders says. Virtual routing lets service providers partition and isolate public and private services in a single router into separate physical and logical routing domains. This allows them to also separate traffic in a single router.
Redback’s latest example of virtual routing is housed in the SmartEdge 100, which had its debut in March. The SmartEdge 100 is intended to enable the delivery of residential triple-play broadband services, including VoIP, real-time video and content delivery, and business Ethernet services such as MPLS- and Virtual Private LAN Service-based VPNs.
The router, a scaled-down version of Redback’s SmartEdge 400 and 800 models, is designed for new network deployments, such as wireless network aggregation and backhaul, and multitenant units, such as university dormitory, hospitality, healthcare and government organizations.
With a variety of applications and requirements, the market for edge routers remains healthy – so much so that Alcatel, Tellabs and Redback are making inroads and opening the market to more players than just the duopoly of Cisco and Juniper.
“We’re seeing a continual movement toward converging networks together, but the competition hasn’t changed,” Tellab’s O’Malley says. “The customer that can deliver the same services most efficiently is going to win.”
