7/24/2012 -- Cisco Systems Inc. seems perfectly placed to benefit from an expected explosion in service provider spending.

According to market watcher Infonetics Research, video, mobility, and cloud trends are causing IP traffic to explode. And service providers are hard-pressed to keep up.

"The three-headed monster of video, mobility, and the cloud is putting enormous pressure on operator networks, and throwing more routers at the problem isn’t the answer because traffic is rising much faster than equipment prices are falling," said Michael Howard, co-founder and principal analyst for carrier networks with Infonetics, in a statement.

Carriers are responding by re-architecting their networks. In this context, "re-architecting" means spending beaucoup bucks on next-gen edge gear, as carriers build out content delivery networks (CDN) and beef up their ability to deliver over-the-top (OTT) video content.

"This is driving a fundamental shift in how IP edge networks are being architected, with carriers combining their fixed and mobile networks for operational efficiencies and using caching and content delivery networks ... to move frequently used content closer to the consumer, speeding up response times and greatly reducing the amount of traffic crossing the network."

That's where Cisco comes into the picture. Service providers list Cisco as the top player in IP edge routers, followed by rivals Alcatel-Lucent and Juniper Networks.

Carriers also rate Cisco and Juniper as the top manufacturers of core routers.

The potential revenues are enormous, Infonetics says. Over half of all carriers expect to deploy transparent caching or CDNs over the next two years.

"Our survey shows the top three drivers for deploying CDNs are providing a better quality of experience for customers, network optimization, and reducing the cost and traffic load associated with delivering over-the-top ... video content," Howard concluded.
--By Stephen Swoyer