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The router market in 2002–03 might have failed to match the spectacular growth curve of LAN switches, but it still clocked an impressive 8.5 percent growth to touch Rs 459 crore. This was a marked improvement over the previous year, when the market had grown by only 4 percent to reach Rs 423 crore from Rs 408 crore.

Technology trends
As far as enterprise class routers are concerned, today users want to handle huge amounts of data traffic and they also need flexibility to support content processing, VPNs, firewalls, load balancing, VLANs, and a lot of other functionalities. Keeping this demand in mind, major vendors like Cisco and Nortel rolled out products that could replace a wide range of network devices with do-it-all boxes.

A router was increasingly seen as a device that could support various applications without affecting the performance of the network. The main challenge for vendors was to keep the routers from collapsing under the weight of so many responsibilities. So most of the vendors started focusing more on factors like performance, integration and cost.

Another major trend was the convergence of voice and data. All router vendors, including Cisco and Nortel, focussed on facilitating voice and data convergence. Vendors like Cisco also added automated packet prioritization and delivery features to the core software that power its routers. These new features simplified the deployment of quality-of-service features in enterprise networks for applications such as VoIP and Auto QoS.

Customer Roster
The government, BFSI and telecom were the verticals witnessing the maximum deployment of routers. Governments of Gujarat, AP and MP were particularly active in purchasing routers, with Cisco emerging as the principal beneficiary. Cisco did substantial business for the APWAN (APNIC) project, for National Highway Authority of India as well as for the Gujarat WAN project (connecting 225 talukas). Even LIC purchased a large number of routers for its project of connecting 1,600 branch offices. The BFSI space had orders of substantial sizes from Bank Of India, Punjab National Bank (connecting 1,000 branches by 2004), 3,000 branches of State Bank of India as well as 85 branches of Syndicate Bank. Most of the PSU banks made purchases from multiple vendors, thereby keeping a sort of backup provision for themselves. In addition, private banks like HDFC, ICICI and Bank of Punjab also made large purchases in routers. Insurance players like LIC, New India Assurance (600 branches), United Insurance, National Insurance Company, Tata AIG, ICICI Prudential and Bajaj Allianz too invested largely on routers.

Router sales substantially improved in the telco space, especially after the flat growth in the previous fiscal. The major catalysts for this improvement were the opening up of the ILD services and the launching of IP telephony services. All the major service providers like BSNL, MTNL, VSNL, BPL Mobile, Reliance, Bharti and Tatanova made serious purchases of routers. Reliance’s Dhirubhai Ambani City facility in Navi Mumbai saw a large influx of routers this year.

With BPO becoming a real hot topic this year, router sales to call centers increased substantially. Prudential made a large purchase from Cisco for its 850-seat captive center being set up in Hiranandani Gardens, Powai. Transworks, Talisma, iSeva were other active purchasers from this domain. So was the HDFC call center at Bangalore and Bharti’s AirTel call center at Mumbai.

Vendor Facts
Cisco again reigned supreme in the router space with nearly 87 percent market share. The only competition in the enterprise class came from Nortel. Apart from Bank Of India, Punjab National Bank, State Bank of India, and Syndicate Bank, Cisco also sold in large numbers to HDFC and ICICI. Apart from traditional verticals, Cisco also sold large number of routers to Dr Reddy’s Laboratories, Guntur Irrigation project and for Suntel in Sri Lanka. Datacraft, HCL Comnet, Wipro Infotech were some of the large integrators that worked with Cisco.

In the ITeS domain, Nortel was particularly active, with nearly 50 percent of its router sales revenues coming from this sector. Some of Nortel’s biggest clients included ICICI OneSource, mSource, as also Citibank and Amex for their call centers. Even HDFC and Airtel were largely Nortel customers.

Apart from Cisco and Nortel, the router space also had players like D-Link, Dax and SMC Networks (the new avatar of Accton), though their shares were still minimal. While D-Link did router business of around Rs 5 crore, Dax and SMC clocked Rs 9 crore and Rs 3.5 lakh respectively. D-Link’s blue chip customers included Hyderabad National Games, Mumbai Port Trust, AP Commercial Tax Department, Tata Internet Services and MS Ramaiah Medical College and Hospital in Karnataka. On the other hand, Dax’s impressive client roster included names like Chennai Port Trust, National Informatics Centre and the various Railways. D-Link tried positioning itself as a major player For a start, it stopped selling Cisco routers,
an exercise it had been doing all along for more than five years since Cisco’s entry in India. This preceded D-link’s own entry into the enterprise-class router segment, though it hopes to consolidate its position here only by the end of 2004.

Rajneesh De