WAN optimization market down, but faring better than other networking segments

BOSTON, USA: Market research firm Infonetics Research released the first quarter (1Q09) edition of its Enterprise Routers and WAN Optimization Appliances.

Matthias Machowinski, Directing Analyst, Enterprise Voice and Data, Infonetics Research, said: "Sales of both enterprise routers and WAN optimization appliances were down in the first quarter, not surprising given the current economic turmoil.

"Similar to the Ethernet switch market, there was a shift to lower-priced routers, including low-end and branch office devices. The WAN optimization segment was down also, but fared better than many other segments, as organizations are able to build convincing ROI cases around their deployments, which should help this segment weather the downturn better than other infrastructure types."

Enterprise router market highlights

* Worldwide total enterprise router revenue came in at $787 million in 1Q09, down 20 percent from the previous quarter, and continuing the downward trend seen since 3Q08.
* All vendors had double digit declines sequentially.
* Router sales were down in all regions, although Asia Pacific declined only 9 percent sequentially, and North America is down the least year-over-year.

WAN optimization appliance market highlights

* After hitting a major milestone by surpassing the $1 billion mark worldwide in 2008, WAN optimization appliance sales dropped 14 percent quarter-over-quarter in 1Q09, to $226 million.
* While tough economic conditions will hamper growth in the WAN optimization market, growing demands on wide area networks will drive some investment, keeping 2009 worldwide revenue essentially even with 2008.
* Vendor market share positions shuffled once again in 1Q09 in the WAN optimization appliance market, with Blue Coat back on top.