The Global Picture
The global markets have a much better infrastructure for WAN connectivity when compared to India. They have high bandwidth backbones already in place covering most geographies. This gives them ease to provide connectivity at all speeds. This market is more developed in the US than in India. The Ethernet/fiber to home and ADSL with wireless are more popular technologies. It depends a lot on the service providers who use a mix of leased circuits, frame relays, ADSL, Ethernet to home and wireless to get their customers connected.

In global markets, dedicated router networks are in the decline. Most customer networks are connected over managed services backbone provided by service providers using Carrier Ethernet or MPLS technologies. This will significantly reduce the CPE requirements.

Routers, as a product, are no longer restricted to do only IP routing. Over the years they have evolved to become multi-services devices. Today's multi-services routers are capable of routing, switching, QoS, traffic engineering, voice services, storage area networking services, etc.

REVENUE STREAMS
The biggest growth driver for this segment in the domestic market continues to be telecom service providers, banking industry for centralized core the banking application providing anywhere-anytime banking, and the various e-Governance projects. There is also a lot of investment in retail and commercial mid-market this year, which is also driving growth.

Overall, the growth in the router market is being fueled by the convergence phenomenon-integration of voice, data and video services, increasing demand for IP-based virtual private networks (VPN) by businesses, growth in the IDC and the ISP segment. Enhanced deployments by the BFSI segment (especially the networking of bank branches as per the RBI directive, and network deployments by private insurance companies) also fuelled the demand for routers. Some other sectors that showed decent traction were manufacturing, services, and government with WAN deployments in place.

Dax continued its successful run as the Top 3 networking brand in routing. Significant breakthough was achieved thanks to the discerning Indian user's understanding of mission critical routing parameters (MCRP). MCRP was coined by Dax to help users identify the technical parameters required in a router to ensure that mission critical application needs are addressed. Dax was able to create a significant impact in the telecom segment, especially with Dotsoft applications, railways (predominantly from the South and East) and in the SMB segment across the country.

As India accelerates its pace to catch up with the global Internet economy, there is a need to drive investments into setting up faster, redundant, scalable and converged networks, which will support the communications needs of an emerging market. Given India's low level of telecommunication penetration and low investment into legacy infrastructure, there are strategic investments expected into the telecommunications sector. This, supported by the lack of basic infrastructure in smaller towns and cities in India, will provide the fillip to the router segment. The SMB segment in these cities increasingly understands the benefits of networking. A number of service providers are investing and will continue to invest in building basic telecom infrastructure to support the demand in these cities. And, one hopes that all these factors coupled with the functionalities of today's routers is going to drive the growth of this market in India.

All businesses in India today are connected with the Internet and also interconnected with their offices. For any two business houses to work with each other, they need to understand and adapt similar working patterns. If one is connected to the Net and uses it regularly, the other has to work on the same lines so that both are in sync with their communication mechanisms. This is driving the growth of connectivity in India and hence the routers. Every new business or old has to be connected using some technology or the other if it is to survive and grow.

Integrated Functions
ADSL is of course a new star in this category but along with this, ISRs (Integrated Service Routers) are making their presence felt with all routing, security, switching and wireless in one box. A box, which is the gateway for the customer to all his connectivity needs, is fast catching up.

WiMax/Wi-Fi implementation is the most significant technology addition. Also, a clear trend is evident in increase of managed services management adoption with the increase in number of offices and employees.

Integrated functionalities built into the router, like security, voice call routing as in a call manager, and application oriented networking are some of the latest additions in routing technologies. Multi-service routers have been introduced by major router manufacturers. These routers provide a series of functions such as advanced IP V4, V6 routing, high speed LAN switching, MPLS quality of service and traffic engineering, firewall and encryption, telephony services, TCP acceleration and SAN connectivity, etc.

What Lies Ahead
Connectivity today plays a key role in all businesses-be it the Net or inter office connectivity. This is driving the router market in India, which is poised for a good growth. We have many technologies driving these hardware devices-leased line, ADSL, wireless to name a few. With ADSL gaining momentum and being price effective, the demand for ADSL routers is ever increasing. The low cost of ADSL is also playing a major role in its growth with VPN tunneling offered by many ISPs.

The Midsize Routers Enterprise class of high capacity, reliability and integrated functionalities like VPN, firewall, IDS will see significant growth of about 30%, while Edge connectivity devices like 2 Ethernet, 1 Wan ports will increase at least by about 50%.

Average price per unit has come down, and with the entry of new players in the market space, all vendors are facing some pressure in terms of bottom-line or profitability percentages. However, the vendors' strategy to face such situations is simple yet effective-enter the market with best of products, create awareness and educate the target audience through a host of activities, appoint channel partners with the appropriate skill sets, and support them well enough in every manner. The router is set to witness another blockbuster year.

Baburajan K
baburajank@cybermedia.co.in

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