Ethernet Switch Revenues Hit $6.29B in 3Q16

10 GbE revenues decline as 100 Gigabit accelerates

By Sean Michael Kerner | Posted Dec 13, 2016
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The networking market for Layer 2 and Layer 3 Ethernet switches notched a 2 percent year-over-year revenue gain, according to IDC. The analyst firm reported in its Worldwide Quarterly Ethernet Switch Tracker that the global L2/L3 switch market generated $6.29 billion in third quarter 2016 revenue.

Different segments of the L2/L3 Ethernet switch market performed differently. The 10 Gigabit Ethernet (GbE) segment generated $2.22 billion in revenue for a 1.3 percent year-over-year decline. While 10 GbE revenue declined, the volume of ports shipped reached 9.76 million, for a 10.6 percent gain over the third quarter of 2015.

The 40 GbE segment is growing fast in terms of both revenue and port shipments. IDC reported that 1.9 million 40 GbE ports shipped in 3Q16 for a 68.5 percent gain, while revenue came in at $756.4 million for a 20.5 percent year-over-year gain.

100 GbE is actually the fastest growing segment of the market, with shipments up by 447.5 percent and revenue up by 330.1 percent.

In terms of vendors, IDC gave Cisco the top spot with a market share of 57.0 percent for the third quarter of 2016, down from the 61.5 percent reported in the third quarter of 2015.

"Recent macroeconomic developments and maturing IT architectures have led to a spectrum of reactions by IT decision-makers across the regions with regard to Ethernet switching investments in 3Q16," Rohit Mehra, IDC's vice president for Network Infrastructure, said in a statement. ""Strong growth in the 40GbE and 100GbE segments specific to datacenter deployments brought a degree of stabilization to a market in transition where the enterprise campus market for switching declined."

The global service provider and enterprise router market is also growing, according to IDC, with revenue for 3Q16 reported at $3.56 billion, for a 2.6 percent year-over-year gain.

Sean Michael Kerner is a senior editor at Enterprise Networking Planet and InternetNews.com. Follow him on Twitter @TechJournalist

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