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 percent and a significant seasonal decline of -12.3 percent quarter-over-quarter.
Meanwhile, the worldwide router market fared somewhat better, growing 2.3 percent year-over-year. Sequentially, the router market also decreased -12.5 percent, according to the preliminary results published by IDC.
From a geographic perspective, the Ethernet switch market saw its highest growth in Latin America (up 11.4 percent year-over-year), relatively good performance in Asia-Pacific (up 1.9 percent year-over-year), and annual declines in both Europe, Middle East & Africa (EMEA) (down -0.5 percent year-over-year) and in North America (down -1.2 percent year-over-year).
“The worldwide Ethernet switch market continues to see different trends across market segments with datacenter deployments seeing growth in spite of the ongoing market transition while the enterprise campus segment is essentially flat lining or seeing slight declines depending on the segment or geography involved,” said Rohit Mehra, vice president for network infrastructure at IDC.
“10GbE and 40GbE switch ports for the datacenter 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 percent year-over-year to $2.0 billion while 10Gb Ethernet switch port shipments grew a strong 25.7 percent 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 percent 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 percent year-over-year, whereas the enterprise segment declined -2.9 percent 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 percent, 11.1 percent, and 9.1 percent year-over-year increases respectively. North America, on the other hand, declined -9.4 percent year-over-year.
From a vendor perspective, Cisco’s Ethernet switch (Layer 2/3) revenue decreased -4.3 percent year-over-year in 1Q14 and its market share was 60.4 percent, which was slightly down from 61.1 percent in 4Q13. Cisco’s market share in the fast growing 10GbE market segments was 62.2 percent in 1Q14. Cisco’s service provider and enterprise router revenue declined -1.8 percent year-over-year this quarter.
HP’s Ethernet switch revenue increased 4.6 percent year-over-year in 1Q14, ahead of the overall market growth. HP’s market share now stands at 9.2 percent in 1Q14, on par with 4Q13, but up from the 8.8 percent in 1Q13.
Juniper had a strong quarter, having outperformed in both Ethernet switching and routing in 1Q14. Its router revenue was up 5.4 percent year-over-year and its Ethernet switch revenues saw exceptional strength, increasing 53.4 percent year-over-year.
“With datacenters seeing ever-increasing application workloads, 10Gb and 40Gb Ethernet is the greatest driver of today’s Ethernet switch market,” said Petr Jirovsk?, research manager at IDC.
“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.”