Though Layer 3 switching appears to be taking business away from traditional routers in the enterprise, Cisco's greater emphasis on sales to service providers is intended to buffer some of that impact, Heritage says. That shift has users pushing their collapsed backbone routers to the WAN edge of the network and front ending them with Layer 2 and Layer 3 switches. Ore. This phenomena has resulted in just single-digit growth for routers over the past few years, Johnson and Heritage say, disputing Ullal's figures. Johnson predicts flat growth for routers by year-end. Yet the impact on Cisco will be due to whatever Cisco does, not the market, according to Johnson.
Cisco understands very well the transitions that are taking place.
It's just a question of how Cisco manages its own transition. Users are just beginning to manage their own transitions from traditional routers to Layer 3 switches, analysts agree. But they disagree on whether Layer 3 switching is ready for prime-time play. But whether Layer 3 switching is ready for enterprise use depends on the enterprise. A router ends up doing a lot of LAN aggregation, as well as WAN aggregation.