Cisco grabs market share in high-end routing market

After poor fourth quarter results, Cisco's John Chambers at last has something to smile about. According to research from Dell'Oro Group, the vendor has managed to build its leadership cushion over Juniper Networks in the Internet routing market.

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By  Greg Wilson Published  August 18, 2001

Cisco has managed to put some distance between itself and fierce rival in the Internet routing market, Juniper Networks.

Research by Dell’Oro Group appears to validate earlier comments made by Cisco’s CEO & president, John Chambers, that the vendor had managed to gain between 3-to-5% market share on Juniper in the second quarter.

According Dell’Oro Group, Cisco holds 60.3% of the high-end routing market, up slightly from 59% in the first quarter. Juniper’s market share dropped from 38% to 34.7% over the same period.

Before the latest quarterly results, hard-charging Juniper had steadily eroded Cisco's dominance in high-end routers market.

High-end routers are devices that telecommunications carriers and service providers use in their networks to direct Internet traffic from one area to another at high speeds.

However, a close look at the figures, will show that Cisco didn’t do it all by itself. With Juniper’s slight slip, a third player, Avici Systems doubled its market share from 2.1% to 4%.

Tam Dell’Oro, analyst with the Dell’Oro Group suggested that Cisco's slightly improved performance was down to the introduction of a high-speed router that matched Juniper’s product.

“Last year Juniper didn’t have any competition in the highest-end router market. This year they do,” said Dell’Oro.

For the second straight quarter, the total size of the high-end router market plunged. Second-quarter sales reached $535.4 million, a 29% drop from first-quarter sales of $753 million.

Tam Dell’Oro said she expected the market to rebound once the economy recovers, and service providers start spending again. The market will be driven upwards, as service providers boost bandwidth to support new services.

“This would be one of the first markets to rebound,” she said. “Service providers we’ve interviewed reiterate their intention to launch new services and say they require more bandwidth in their networks,” Dell’Oro added.

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