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Categories: Cisco NGN

Next generation networking ( #NGN ) will provide a big opportunity for #Cisco (NASDAQ: CSCO) as telecom companies will need more equipment to handle the spike in data traffic. As it turns out, data traffic is estimated to grow 53% annually until 2020, creating demand for next-generation routing equipment, a market Cisco currently leads. How big could NGN routing get? NGN routing was 15% of Cisco’s business in fiscal year 2016, which ended in July last year. The company’s market share in this business stood at 40% at that time, putting the size of the overall market at roughly $18.5 billion . Grand View Research forecasts that the revenue opportunity from routers will rise to $41 billion by 2022, growing at a rate 14.2% annually. This growth rate suggests that the size of the routing market will increase to almost $21 billion this year. Cisco’s current standing in NGN routers puts the segment’s revenue at $8.40 billion this fiscal year, up 13% from last year. The company should get close to this mark as its NGN routing revenue in the first half of the fiscal year was almost $4 billion, and its sales should pick up pace in the second half due to order growth. If Cisco can maintain its currently slice of the NGN market, it could mean revenue of over $16 billion from the segment by 2022.

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