ACG Research

ACG Research
We focus on the Why before the What

Monday, April 22, 2013

Increases in Total Worldwide Service Provider Carrier Router-Switch Market Projected

The Total Worldwide Service Provider Carrier Router-Switch market is projected to moderately increase from $11.7B to $15.1B by 2018. From a regional perspective, APAC and the Americas, respectively, will lead the growth as carriers respond to increases in data traffic, big data, virtualization, software-defined networking and the unrelenting demand for innovative and intelligent applications and services. The projected five-year growth will be strongest (in order of growth) in APAC (CAGR +6.4%), Americas (CAGR +4.9%), and EMEA (CAGR +4.9%). ACG anticipates that the total router and switching market will increase 4.6% in 2013 as well as increase in each successive year. 

In spite of challenges facing global economies, the emphasis on new and innovative services will instigate a significant shift in networking. Cloud services and machine-to-machine connectivity, which have redefined the way applications run on the network, exposing their underlying limitations, have contributed to the explosion of inter-data center traffic. The long-term demand for high-performance and innovative networks/architectures that address inter-connected data centers will increase in momentum. 

In the next five years service providers will continue to focus on monetizing emerging opportunities, which will require networks that enable them to accelerate service innovation, scale services, and expand the customers’ experiences all within a viable economic framework. Service providers are looking at vendors’ solutions that provide a single operating system, operational simplicity and a platform with the highest possible scale across bandwidth, subscribers, and services. 

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Tuesday, April 9, 2013

OpenDaylight: The Break-Away Moment for SDN

The Linux Foundation just announced the formation of a new open source development project intended to harness contributions from a wide range of cloud and networking industry participants to accelerate development of a consistently structured framework for software-defined networks or SDNs. This announcement is a watershed in the networking industry’s evolution, as it holds the potential to break multiple categories of developers free from the constraints of sometimes hopelessly constrained API constructs. By bringing firms as diverse as Cisco, IBM, Juniper, Red Hat, Microsoft, Intel and VMware (to name just a few) together in a mutual tryst to contribute intellectual energy and technology contributions to a normalized set of SDN building blocks that can serve as the foundation on which other application innovations can be built, the networking community has arrived at a milestone that has the potential of being its lift off point toward an unprecedented range of innovation. Multifaceted application systems may just end up having a rich catalog of easily integrated capabilities that will accelerate their uptake and deployment.

Is this rosier picture of network-savvy applications a guaranteed outcome of OpenDaylight’s work? Hardly, the outcomes remain to be seen from the efforts of its contributors. But is the possibility of a rapidly developed and richly endowed common foundation of SDNs significantly improved by forming the OpenDaylight Project versus limping along with the smorgasbord of SDN approaches we have been experiencing in the first year of two of the paradigm’s emergence? It’s hard to arrive at a different conclusion, when you think of the range of talents assembled toward achieving the project’s objectives, and imagine the best practices in open source platform development that can be brought to bear on the process with the Linux Foundation’s experience close at hand. The full Internet community stands to be the beneficiary with each company that contributes able to reap some of the benefits for the use cases and applications on which they choose to focus for their customers.

While momentum is only discernible with delivery of concrete capabilities along the project timeline, you can see it foreshadowed by the strength of the contributing assembly. With proper guidance, it would seem the break-away period for SDN is more within sight now than it ever has been before. 

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Paul Parker-Johnson

Tuesday, April 2, 2013

Building Broadband Past the Saturation Point

U.S. broadband has reached the end of its growth phase, and the industry is now shifting from building infrastructure and acquiring customers to creating sustainable business models. 

The U.S. fixed-line broadband market appears to have reached the saturation point. The most recent FCC broadband report with data through 2011 indicates that about 80% of U.S. households are served by fixed-line broadband. It also shows the classic S shaped market development curve with the last inflection point in the S occurring in 2007. This data, when combined with year-end 2012 data from the largest fixed-line broadband operators, confirms market saturation. Fixed-line broadband connections for 4Q12 compared to the previous year showed little change: AT&T (NYSE: T) 0.3%, CenturyLink (NYSE: CTL) 3.5%, Comcast (Nasdaq: CMCSA) 6%, and Verizon (NYSE: VZ) 1.4%.

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