Cisco Remains Top Dog In Ethernet Switch Market

It will come as no surprise that Cisco Systems continues to be the dominant player in a growing Ethernet switch market, according to IDC analysts.

The market is being fuelled by such trends as cloud computing, virtualisation and mobility, it said.

Ethernet Switches

In the second quarter, revenue for Ethernet switches worldwide jumped 8.5 percent, to $5.5 billion (£3.5bn), while 10 Gigabit Ethernet switch sales increased 22.9 percent from the same period last year. In addition, 10GbE port shipments hit a record 3 million in the quarter, leading the overall market growth.

The strong performance of Ethernet switches – which saw revenue increases in every region, including economically troubled Europe – is an indication that networking continues to play a key role in new IT infrastructure deployments, according to Rohit Mehra, director of the Enterprises Communications Infrastructure business at IDC.

“10GbE along with the emerging 40GbE Ethernet switch segments are leading the market to higher levels, clearly proving the point that growth in applications, virtualisation and mobility has to be looked at in conjunction with the underlying wired infrastructure in data centres and campus deployments,” Mehra said in a statement 23 August.

IDC’s findings fall in line with numbers that analysts at the Dell’Oro Group rolled out 15 August. The Dell’Oro analysts said the Layer 2/3 Ethernet switch market will grow to almost $25 billion (£15.8bn) in 2016, with the key driver being Ethernet switches designed for large data centre deployments.

In addition, by 2015, 10GbE switch sales will make up the bulk of Ethernet switch revenue, while revenue in the 40GbE and 100GbE switch space will reach almost $3 billion (£1.9bn) by 2016. By that time, 40GbE and 100GbE revenue will account for more than 20 percent of the market. Some networking vendors, including Cisco and Extreme Networks, already have offerings in this segment, according to Dell’Oro.

Cloud Impact

“The cloud is changing how networks are built and who owns data centre equipment,” Alan Weckel, senior director of Dell’Oro, said in a statement.

Weckel said that data centres will evolve to become “similar to ‘clouds,’ in which any server can connect to any resource within a data centre. It is unclear whether enterprises will tend to own and run their own clouds, or whether they will outsource their clouds.”

Greater outsourcing will only ramp up the competition between networking switch vendors, given that the number of data centres will be reduced. It also will mean fewer – but larger – data centre deals, he said.

“Concurrently, we are moving toward abstracting the network from the user/application, which is changing where some of the engineering effort in data centre switching is being deployed,” Weckel said.

According to IDC’s numbers, Cisco remained the top Ethernet switch vendor, holding 62.1 percent of the market, a drop from the 62.6 percent it held during the same period in 2011. Next up was Hewlett-Packard, at 9.2 percent; Alcatel-Lucent, at 3.07 percent; Huawei Technologies, at 2.85 percent; and Juniper Networks, at 2.48 percent.

Cisco’s share of the 10GbE switch market in the second quarter was 66.8 percent.

Demand for all Ethernet switches continues to grow, and even offsets global economic problems, according to Petr Jirovsky, senior research analyst in IDC’s Networking Trackers Group.

“Even the Gigabit Ethernet segment showed strength in 2Q12, with over 55 million ports shipped in the quarter, and market revenue growing 6.5 percent from the previous quarter,” Jirovsky said in a statement. “The overall market drivers, such as proliferation of video traffic on the network, are mitigating to a large extent the increased macroeconomic uncertainty and weakness in the public sector in many regions.”

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