The US computer networking equipment industry includes about 1,000 companies with combined annual revenue of $50 billion. Major companies include Brocade Communications, Cisco Systems, Extreme Networks, and Juniper Networks, as well as the US operations of foreign companies such as Alcatel-Lucent, Fujitsu, NEC, and Siemens. The industry is highly concentrated: the 50 largest companies generate about 90 percent of revenue.
COMPETITIVE LANDSCAPE
Demand is driven by economic growth as enterprises and service providers expand networks to meet increasing user needs, and by the superior performance of new equipment, which encourages replacement of existing equipment. Profitability of individual companies depends on timely development and delivery of products in high volumes for large customers. Large companies have advantages in economies of scale in broad product offerings and services. Small companies can successfully compete by designing and developing products that meet highly specialized needs. The industry is capital-intensive.
The US telecommunication industry is in transition: the current telephone backbone network is being converted from circuit-switched to multimedia networks combining voice, data, and video over high-speed links. This transition will require replacing a substantial portion of equipment, presenting an opportunity for all equipment vendors.
PRODUCTS, OPERATIONS & TECHNOLOGY
Major products of networking equipment manufacturers are switches, routers, and network control equipment interconnected using fiber optic and high-speed wiring. Major services of equipment suppliers include system and network design, software development, installation, monitoring, and maintenance. Other hardware and software products include ...
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