Edge routers help carriers deal with video, mobile, cloud service trends, says Infonetics

BT, TELUS, Portugal Telecom, Belgacom are finding utility in a converged edge network
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Service providers trying balance three main service types—video, wireless services, and cloud—may have found their solace in the IP edge router, Infonetics Research says.

In its latest white paper, "Routers on the IP Edge: Overcoming the Triple Challenge of Video, Mobility, and Cloud," Infonetics looks at how four service providers made a transition to a distributed converged IP edge architecture leveraging IP edge routers.  

Some of the service providers that are taking advantage of this new architecture include BT (NYSE: BT), TELUS (Toronto: T.TO), Portugal Telecom (NYSE: PT), and Belgacom.

Michael Howard, Infonetics Research co-founder and principal analyst for carrier networks, and author of the white paper, said that while "carriers are nearing completion of their IP packet networks, they're faced with new challenges from video, mobility, and the cloud that have the ability to overwhelm these networks."

One of the issues in today's edge network is that it consists of multiple overlay networks supporting individual services that can't scale and provide the service quality these services require. With the advent of Infonetics calls the "new IP edge," service providers can deploy a consolidated multiservice delivery point for IP video, mobile, and cloud services.

Howard said that "a new IP edge is emerging where multiple IP networks are consolidated into just a few--or preferably one--capable of addressing the scalability and performance requirements of today's services, enabling operators to turn the triple challenge of video, mobility, and cloud into opportunities."   

Not surprisingly, the biggest threat to service providers is the transition from traditional multicast IPTV service, where one stream is sent to every user, to unicast broadband video, where a separate stream is sent to each single user. Of course, over-the-top video consumption from providers like Hulu and Netflix (Nasdaq: NFLX) is part of this trend.

The ongoing move to a converged IP edge certainly is good news for the edge routing industry, especially its main suppliers Alcatel-Lucent (NYSE: ALU), Cisco (Nasdaq: CSCO) and Juniper Networks (NYSE: JNPR).

Juniper Networks reported in its Q3 2012 report that revenue rose 4% sequentially to $1.12B due to sales of edge and core routing products.

Meanwhile, Alcatel-Lucent and Cisco, which will report their Q3 2012 earnings in November, in Q2 saw strong gains IP routing revenues. Alcatel-Lucent's IP division revenues rose 16.5 percent year-over-year, to €473 million ($582.5 million) due to strong sales of IP edge routers to service providers like NTT DoCoMo (NYSE: NTT), while Cisco's IP router revenue rose 4 percent year over year to $2.09 billion, respectively.

Infonetics Research IP Edge diagram

For more:
- see the release
- here's the report (PDF)

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