Ethernet and content security on the growth path

Analyst company Infonetics says WAN optimisation market slips in Q1 but expected to hit one billion in revenue over the year

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By  Sean Robson Published  June 8, 2008

Research firm Infonetics states that the WAN optimisation market has taken a dip in the first quarter of 2008, but predicts $1 billion in revenue this year.

Worldwide sales of Ethernet switches grew by 9% in the first quarter of 2008, from the same period last year, while the content security market enjoyed 6% sequential growth in the same period. This according to the latest reports from communications market research firm, Infonetics Research.

"Fears of economic uncertainty impacting the switch market aren't panning out so far; while some vendors posted dismal sequential results, much was attributable to seasonality, and other vendors picked up whatever slack was left. At this point, we don't have any solid evidence-based reasons to reduce our outlook for this market," said Matthias Machowinski, directing analyst for enterprise voice and data at Infonetics.

Infonetics reported that while most segments of the Ethernet and application switch market were flat to down in the first quarter, most are up on a year-over-year basis. Another bright spot was the growth displayed by the fixed managed Layer 3 10G Ethernet ports and 1G Ethernet unmanaged ports.

Content security is expected to show sustained growth in the coming year with worldwide revenue forecast to leap up by 24% from the previous year. According to Infonetics, the increase in sales stems from the uncertain economic outlook as well as the prevalence of hacking.

"On the vendor front, the first quarter of 2008 was a bit sideways, with very mixed results: BlueCoat was down, Cisco was way up, and other vendors showed good incremental growth," said Jeff Wilson, principal analyst for network security at Infonetics.

According to Infonetics, the WAN optimisation was one of the segments that almost stalled in the first quarter of 2008, with revenues dipping by 2%.

"After being on a tear for the last three quarters, the WAN optimisation market slipped in the first quarter of 2008. Incidentally, it did so a year ago as well, illustrating that even emerging segments aren't immune to the occasional slowdown. We still think this market will pass US$1 billion in revenue this year," stated Machowinski.

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