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Cisco’s Routing Business Revenue Continued to Fall in Fiscal 3Q17

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Revenue fell 2% YoY

Cisco Systems’ (CSCO) Routing segment saw a revenue fall of 2% YoY (year-over-year) in fiscal 3Q17. Revenue in this segment fell from $2.07 billion in fiscal 3Q16 to $2.03 billion in fiscal 3Q17. Cisco stated that although its Routing segment’s revenue fell in the quarter, it saw a rise in orders. Routing is Cisco’s third-largest business segment in terms of revenue after its Switching and Service business segments.

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Last year, Cisco stated that it was well-positioned to drive the transition to software-defined wide area networking (or WAN) with its IWAN (Intelligent WAN) portfolio, which would give it opportunities in the routing space. According to Cisco, it was seeing continued strength in its web-scale customers, where its core development continued.

Cisco has a share of 42.2% in 4Q16

According to IDC, Cisco had a market share of 42.2% at the end of 4Q16, down from 45% in 4Q15. The other major players in this space include Juniper (JNPR) and China’s (FXI) Huawei with market shares of 16.9% and 18.8%, respectively. While revenue for Cisco fell 4.8% YoY in 4Q16, Juniper’s and Huawei’s revenue rose 6.5% and 16.2% YoY in 4Q16.

The global routing market is projected to be a $14 billion market, rising at a CAGR (compound annual growth rate) of 1%. In the routing space, NFV (network functions virtualization) and network management orchestration are projected to rise at a CAGR of 79.0% over the next three years.

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