Ethernet switch sales flatten but 40 Gbps starts to take off

IDC's abacus puts Cisco first, daylight second

The Ethernet market remains pretty dull: flat on a year-on-year basis, prone to quarter-on-quarter swings in individual segments, and dominated by Cisco.

One vendor that can wave IDC's latest numbers in front of its investors is Juniper Networks, which piled on 39.4 per cent year-on-year, but at US$230 million for the quarter it's still a bit-player compared to Cisco's $3.79 billion.

Cisco's nearest competitor, HP, declined slightly on a year-on-year basis, from $552.25 million in Q3 2014 to $554.52 in Q3 2015.

The total Q3 Ethernet switch market revenue was $6.1 billion, just two per cent higher than for the same quarter in 2014, and the enterprise share slipped from Q2 to Q3 by 7.2 per cent.

North America was the best place to be selling switches in 2015, with IDC saying is rose 8.2 per cent year-on-year. The Asia-Pac rose 3.9 per cent, China by 3.6 per cent, and Western Europe was nearly flat at 0.8 per cent.

Other regional markets were even weaker in the year, with weakening currencies probably contributing to some of the results: Australia was down by five per cent, the Middle East and Africa down by one point, Latin America down by nearly 10 per cent, Japan by nearly 20 per cent, and Central and Eastern Europe by 22.5 per cent.

A bright spot for vendors is that customers seem to be drinking the 40 Gbps kool-aid. While 10 Gbps port shipments rose by 27.4 per cent, prices are falling, so the segment value dipped by 1.6 per cent. The 40 Gbps segment, on the other hand, rose 41.4 per cent year-on-year to a value of $644 million.

The router market was even duller than the switch space, according to IDC: the quarter was flat because while service providers spent a miserly 1.1 per cent more than in Q3 2015, enterprises spent 3.5 per cent less.

The numbers also suggest the white-box market could be struggling. The number-two spot in the Ethernet switch market, “other”, slipped from $1.234 billion in Q3 2014 to $1.146 billion in 2015. ®


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