Cloud providers' 100 GigE purchases drove up router revenue $13B, says Dell’Oro

cloud

Traditional service providers may have put a hold on near-term network spending, but Dell’Oro said that cloud service operators’ expansions drove up the service provider (SP) router and carrier Ethernet switch (CES) market to over $13 billion in 2016.

Alam Tamboli, senior analyst at Dell'Oro Group, said that demand from demand from cloud providers like Amazon Web Services, Microsoft Azure and Google, has continued to drive the market for SP and CES solutions.

"This new wave of customers will be of ever-increasing importance for the market's growth into 2017 and beyond,” Tamboli said in a release.

RELATED: Juniper’s Rahim: Carrier spending outlook is still somewhat challenged

Furthermore, consistent demand worldwide for 100 GE ports in core networks has propelled the Core Router market to surpass revenue records set in 2008. In China, specifically, 100 GE demand surged in 2016 as operators in the country built out backbone and Data Center interconnect networks.

Within the router segment, the research firm reported core revenue revenues for the full year broke the revenue record set in 2008.

Tamboli said that “consistent demand worldwide for 100 GE ports in core networks has propelled the Core Router market to surpass revenue records set in 2008.”

He added that in China “100 GE demand surged in 2016 as operators in the country built out backbone and Data Center interconnect networks.”

This was the result of demand for 100 GigE ports in core networks.

Tamboli said that Huawei saw the most growth in the Core Router segment.

“Huawei was the biggest winner in China. Outside of China, Juniper did very well with Cloud providers, allowing it to gain market share against Huawei and maintain a second-place ranking," Tamboli said.

Juniper reported that fourth-quarter routing product revenue was $654 million, up 1% year-over-year and up 5% sequentially. The vendor told investors that cloud providers contributed the majority of routing revenue, which was partially offset by declines in the cable and telecom segments.