IDC: Virtualization, Cloud Drive 2Q Ethernet Switching Growth

Ethernet switching revenue growth was up 32.7 percent in the second quarter of 2010, according to the researcher.

By Thor Olavsrud | Posted Aug 25, 2010
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The growth of virtualization, cloud, VoIP and video over IP have been the leading drivers in a strong second quarter for Ethernet switching and Ethernet routing markets worldwide, according to a new report by industry researcher IDC.

In its Worldwide Quarterly Enterprise Networks Tracker, IDC noted that Ethernet switching had experienced year-over-year revenue growth of 32.7 percent in the second quarter of 2010, while Ethernet routing was up 11 percent year-over-year.

"The second quarter performance was very good, following on the heels of exceptional first quarter results for the Ethernet switch market," Rohit Mehra, director at IDC for enterprise communications infrastructure, said in a statement. "As seen in previous years, the second calendar quarter builds on the performance of the first, which is what the market delivered, showing strong year-over-year growth from the slowdown the market witnessed in 2009."

"The continued adoption of Power over Ethernet (PoE) and gigabit Ethernet is also being helped by the underlying networking drivers -- the growth of voice and video over IP applications, network-attached devices, virtualization and cloud computing."

IDC noted that industry leader Cisco's Ethernet switch market share increased to 65.8 percent in 2Q10, up from 62.8 percent in 2Q09. However, that's down slightly from the 68.3 percent share it held in the first quarter of 2010, which IDC classified as "exceptionally strong."

The research firm noted that Cisco (NASDAQ: CSCO) performed on par in the Service Provider router market and accounts for 46.1 percent of Service Provider router revenue, which is no change from its performance in 2Q09.

On the worldwide router market front, IDC found "moderate strength" in 2Q10. The research firm said the enterprise router market was marginally lower compared with 1Q10 but still showed an 8 percent year-over-year gain. IDC said the segment continues to be soft and off by about 25 percent from the record levels set in 2007 and 2008. Service provider router revenue accounted for 73.9 percent of the router market and includes both core and edge routers, IDC said.

"The continued market recovery in 2010 is very encouraging with all regions and market segments making a contribution," Cindy Borovick, vice president for enterprise communications infrastructure and data center networks at IDC, said in a statement. "IDC's Worldwide Quarterly Enterprise Networks Tracker shows a strong 87.9 percent year-over-year increase in 10GbE switch revenue in 2Q10, and for the first time, there were more than 1 million 10GbE ports shipped in the quarter. The 10Gb adoption was driven by data center, cloud and campus buildouts."

In April, Borovick noted that the biggest driver pushing enterprises to invest in the space is the need for IT to create efficiencies in the overall business. And that need to create efficiency and drive down cost has particularly fueled growth in WAN optimization.

According to Borovick, optimizing traffic has become increasingly important along with the growing trend in data center convergence, which IDC defines as the combination of server, storage and network infrastructure into a pool of resources that can be assigned as needed to business services.

 

Thor Olavsrud is a contributor to InternetNews.com, the news service of Internet.com, the network for technology professionals.

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