ADC revenue rose 5% in Q3, F5 Networks leads

Telecom Lead U.S: Worldwide application delivery controller (ADC) revenue rose 5 percent in 3Q12 from 2Q12, but year-over-year (YoY) growth decelerated again and now stands at +6 percent, falling from +27 percent YoY growth in 3Q11.

F5 Networks continues to lead the pack in ADCs, capturing nearly half of 3Q12 revenue while Citrix and Cisco round out the top 3 market share slots, according to Infonetics Research. Cisco recently announced its intention to exit the ADC market, presenting an opportunity for F5 and Citrix to grow market share going forward.

WAN optimization revenue grew 3 percent sequentially in 3Q12, but is down 4 percent from the year-ago 3rd quarter. Perennial leader Riverbed again dominated the WAN optimization segment in 3Q12, with almost 3/5 market share; Cisco remains solidly in 2nd place.

“While ADCs and WAN optimization appliances posted modest revenue gains in the 3rd quarter, the pace of growth in these segments decelerated year-over-year,” said Sam Barnett, directing analyst for data center and cloud at Infonetics Research.

“Top-line revenue growth in the ADC market is slowing due to the lower ASPs associated with virtual solutions versus their hardware-based counterparts, and saturation at the high end of the WAN optimization market is pressuring near-term growth,” Barnett added.

“We believe this will change as more virtualized solutions enter the mainstream, helping to restore higher levels of overall growth to the WAN optimization and application delivery controllers markets,” according to Barnett.

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