Research firm: Rising tide lifts network spending

Carrier and enterprise network spending rose 9 percent in 2006 and will go up 20 percent more by 2010, Infonetics said.

Both enterprises and service providers are opening up their wallets for networks, and they'll keep it up at least until 2010, according to Infonetics Research.

Sales of both telecommunications and data-network gear rose 9 percent in 2006 from the previous year, the company said Thursday. The year's total spending went over US$123 billion worldwide, and it is due to go higher, rising another 20 percent to reach US$148 billion in 2010, Infonetics said.

Carriers and corporations alike are investing because they want to add voice and multimedia applications traffic to data networks, according to the Campbell, California, research company. Enterprises are also starting to add advanced capabilities for security and traffic management. New multimedia Web applications, particularly streaming video, have been cited in burgeoning Internet traffic.

IPTV (Internet Protocol television) will play a growing role in the buildout, Infonetics predicted. IPTV equipment will double its share of the total networking market between 2006 and 2010, the researchers said. IMS (IP Multimedia Subsystem), a technology to deliver the same services over different kinds of networks, will be another fast-growing field.

A growing networking industry doesn't necessarily mean an expanding vendor base, however. Infonetics' report came just as Avici Systems Inc., launched in 1997 as one of several would-be rivals to Cisco, closed down its routing business. Avici and others hoped to take a chunk of the market for big routers that sit at the core of service-provider networks and have to be installed or expanded as traffic gets heavier. Cisco and Juniper Networks Inc. dominate that market today.

In the total world telecommunications and data-networking market studied by Infonetics, Cisco is the biggest vendor with 20 percent, followed by Alcatel-Lucent.

The fastest growth in spending is happening in the Asia-Pacific region, which made up 28 percent of worldwide revenue in 2006. Meanwhile, 32 percent was from Europe, the Middle East, and Africa, 30 percent was from North America, and 10 percent of spending came from Central American and Latin America.

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Stephen Lawson

IDG News Service
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