Ethernet Switch, Router Markets Rebound

A recovery looks to be underway in networking as both enterprise and carrier spending on Ethernet networking gear picks up.

By Sean Michael Kerner | Posted May 27, 2010
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Enterprises and telcos gobbled up switches and routers during first quarter, according to new industry analyst research -- a development that points to reinvigorated interest among IT buyers in networking gear.

According to IDC's Worldwide Quarterly Enterprise Networks Tracker report for the first quarter of 2010, Ethernet switch revenues ballooned by 35.3 percent on a year-over-year basis. Growth in switch revenues came in part from increased demand for 10-gigabit Ethernet, which hit a new milestone in the first quarter of 2010.

"The 1Q10 results include a remarkable 111.2 percent year-over-year increase in 10GbE switch revenue, and for the first time, 10GbE revenue surpassed the $1 billion mark, reaching $1.15 billion for the quarter," said Petr Jirovský, a senior research analyst at IDC, said in a statement. "The 10Gb adoption was driven by data center, cloud, and campus buildouts."

Growth in switching revenues for 2010 comes after declines reported by IDC in 2009.

In term's of Ethernet switching vendors, IDC identified Cisco as having the biggest share gains. According to IDC, Cisco's Ethernet switching revenue market share hit 68.5 percent during the quarter, which is the highest level reported for Cisco since 2006.

Cisco itself has also recently boasted about its growth in switching revenue. During Cisco's third-quarter fiscal 2010 financial results call, CFO Frank Calderoni reported that switching revenues grew by 40 percent during the quarter, hitting $3.7 billion. Calderoni also noted that Cisco's quarterly switching revenue represented the highest year-over-year growth in revenue for the category that the company has experienced in nearly a decade.

Rival vendor Juniper Networks, meanwhile, is also seeing growth from its switching business. During Juniper's first-quarter 2010 financial call, the company reported strong gains from its EX switch business, with revenues hitting $77 million. Juniper first entered the switch market at the beginning of 2008.

"Juniper is one of the fastest-growing enterprise vendors ever to enter the market," Andy Ingram, vice president of product marketing for fabric and switching technologies at Juniper Networks, said in an e-mail to InternetNews.com." Juniper’s EX Series switches are part of our arsenal of solutions that make it easier for customers to flatten the network and transform the economics and experience of the data center."

Routers

IDC reported that overall Ethernet router revenue in the first quarter of 2010 grew by 15.1 percent compared to a year earlier. The gain in router revenues comes after a year of reported declines owing to frozen or severely curtailed technology spending. During first quarter, however, the strongest growth for router revenues came from the service provider segment ,which according to IDC, grew by 21.9 percent on a year-over-year basis.

As was the case with switching, IDC noted that Cisco leads the service provider router space with a first-quarter 2010 market share of 52.9 percent. According to IDC, Cisco's first-quarter service provider business grew by 41.3 percent compared to a year earlier.

Meanwhile, Infonetics Research this week reported that according to its data, revenues for the carrier Ethernet switch market were up by 22 percent year-over-year. Infonetics also identified Cisco as being a key driver for market growth in the market as well.

"Cisco is on a roll, bumping up their service provider IP core and edge router revenue by 6 percent in the first quarter of 2010 compared to the previous quarter, and up 33 percent compared to the first quarter of 2009," Michael Howard, co-founder and principal analyst for carrier and data center networks at Infonetics Research, said in a statement.

 

Sean Michael Kerner is a senior editor at InternetNews.com, the news service of Internet.com, the network for technology professionals.

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