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    Worldwide Ethernet Switch Market Grows, Router Sales Fall

    By
    Nathan Eddy
    -
    September 16, 2014
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      routers and ethernet switches

      Worldwide revenues in the Ethernet switch market reached $5.7 billion in the second quarter of 2014, representing an increase of 6.2 percent year over year and 8.1 percent quarter over quarter, according to a report from IT research firm IDC.

      The report found 10Gb Ethernet switch (Layer 2/3) revenue increased 7.8 percent year over year to reach $2.2 billion, while 10Gb Ethernet switch port shipments grew a strong 23 percent year over year to reach 6 million ports shipped in 2014’s second quarter.

      In addition, 40Gb Ethernet continues to expand as a standalone segment and now accounts for more than $323 million per quarter in revenue, as 10Gb and 40Gb Ethernet continue to be the primary driver for revenue growth in the overall Ethernet switch market.

      Growth in cloud deployments and increasing demand from data centers across the globe are expected to continue to drive the 10GbE and 40GbE Ethernet switch market, the report noted.

      “Overall the router market has been fairly stable and steady the last few years, but on occasion, the service provider and enterprise router segments have exhibited somewhat different market characteristics,” Rohit Mehra, vice president of network infrastructure at IDC,” told eWEEK. “In the second quarter of this year, while the SP segment saw a slight decline, the enterprise market saw a significant slowdown compared to the same quarter a year ago.”

      Mehra said much of this decline was limited to regions such as North America, while other regions fared better, and that overall, the quarter results were positive—he noted IDC expects the market to return to a more stable performance going forward.

      From a vendor perspective, Cisco’s Ethernet switch (Layer 2/3) revenue increased 1.5 percent year over year in the second quarter but Cisco’s market share dipped below 60 percent for the first time to 59.8 percent in the second quarter.

      This was down from 60.5 percent in the first quarter of the year and 62.6 percent in the second quarter of 2013.Cisco’s market share in the fast growing 10GbE market segment was 61.3 percent in 2Q14, down from 67.6 percent in 2Q13.

      The company’s service provider and enterprise router revenue declined 13.3 percent year over year this quarter, the IDC report said.

      HP’s Ethernet switch revenue increased 11.9 percent year over year and 18.2 percent quarter over quarter in 2Q14, significantly ahead of the overall market.

      The company’s market share now stands at 10 percent in 2Q14. Juniper also had a strong quarter, outperforming the overall market in both Ethernet switching and routing.

      Its router revenue was up 5.2 percent year over year and its Ethernet switch revenue saw a robust increase of 26 percent year over year.

      Meanwhile, worldwide router market revenues declined 4 percent year over year with varied results across the key segments within the market, despite growing 7.6 percent sequentially over the seasonally weak 1Q14.

      Japan and Latin America registered the best performance in 2Q14 with year-over-year growth in excess of 7 percent. The Middle East & Africa region grew 4.6 percent year over year and Western Europe added 1.7 percent growth in 2Q14.

      The Asia Pacific excluding Japan (APeJ) region finished the second quarter flat, while North America (down 11.5 percent year over year) and CEE (down 6 percent) effectively dragged the overall market lower in 2Q14.

      Nathan Eddy
      A graduate of Northwestern University's Medill School of Journalism, Nathan was perviously the editor of gaming industry newsletter FierceGameBiz and has written for various consumer and tech publications including Popular Mechanics, Popular Science, CRN, and The Times of London. Currently based in Berlin, he released his first documentary film, The Absent Column, in 2013.

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