The worldwide Ethernet switch market (Layer 2/3) reached $5,2-billion in the first quarter of 2014 (1Q14), representing year-over-year growth of 0,4% and a significant seasonal decline of -12,3% quarter-over-quarter.
Meanwhile, the worldwide router market fared somewhat better, growing 2,3% year-over-year. Sequentially, the router market also decreased -12,5%, according to the preliminary results published in the International Data Corporation (IDC) Worldwide Quarterly Ethernet Switch and Router Tracker.
From a geographic perspective, the Ethernet switch market saw its highest growth in Latin America (up 11,4% year-over-year), relatively good performance in Asia/Pacific (up 1,9% year-over-year), and annual declines in both Europe,
Middle East & Africa (EMEA) (down -0,5% year-over-year) and in North America (down -1,2% year-over-year).
“The worldwide Ethernet switch market continues to see different trends across market segments with data centre deployments seeing growth in spite of the on-going market transition while the enterprise campus segment is essentially flat lining or seeing slight declines depending on the segment or geography involved,” says Rohit Mehra, vice-president: network infrastructure at IDC.
“10GbE and 40GbE switch ports for the data centre and campus core remain the growth engine for this market, although we do expect the GbE market to hold its own with port shipments during the coming years.”
10Gb Ethernet switch (Layer 2/3) revenue increased 8,1% year-over-year to $2-billion while 10Gb Ethernet switch port shipments grew a strong 25,7% year-over-year to 4,9-million ports in 1Q14.
40Gb Ethernet is starting to reach critical mass as a stand-alone segment and now accounts for more than $250-million per quarter in revenue. 10Gb and 40Gb Ethernet continues to be the primary driver of the overall Ethernet switch market.
The worldwide enterprise and service provider router market grew 2,2% year-over-year in 1Q14. However, performance of the key segments within the router market varied widely with the service provider segment growing 4,2% year-over-year, whereas the enterprise segment declined -2,9% year-over-year.
The router market also saw a varied performance on a regional basis. Asia/Pacific, Latin America, and EMEA all showed solid growth with 13,8%, 11,1%, and 9,1% year-over-year increases respectively. North America, on the other hand, declined -9,4% year-over-year.
From a vendor perspective, Cisco’s Ethernet switch (Layer 2/3) revenue decreased -4,3% year-over-year in 1Q14 and its market share was 60,4%, which was slightly down from 61,1% in 4Q13. Cisco’s market share in the fast growing 10GbE market segments was 62,2% in 1Q14. Cisco’s service provider and enterprise router revenue declined -1,8% year-over-year this quarter.
HP’s Ethernet switch revenue increased 4,6% year-over-year in 1Q14, ahead of the overall market growth. HP’s market share now stands at 9,2% in 1Q14, on par with 4Q13, but up from the 8,8% in 1Q13.
Juniper had a strong quarter, having outperformed in both Ethernet switching and routing in 1Q14. Its router revenue was up 5,4% year-over-year and its Ethernet switch revenues saw exceptional strength, increasing 53,4% year-over-year.
“With data centres seeing ever-increasing application workloads, 10Gb and 40Gb Ethernet is the greatest driver of today’s Ethernet switch market,” says Petr Jirovsky, research manager in IDC’s Networking Trackers Group.
“However, regional variations in the market persist and vendors are cautioned to take this into account while working on their near- to mid-term go-to-market strategies.”
