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  1. Hardware
September 19, 2016

Digital transformation projects boost worldwide Ethernet switch sales in Q2

By Ellie Burns

The worldwide Ethernet switch market has posted 3% increase in its revenue to $5.97bn for the second quarter of this year, helped by an increase in digital transformational projects and cloud deployments.

In constrast, the worldwide total enterprise and service provider (SP) router market’s revenue fell 2% to $3.67bn in the quarter compared to the same period a year earlier, according to a report released by International Data Corporation (IDC).

IDC network infrastructure vice president Rohit Mehra said: “Despite no region seeing a voluminous shift in either direction, digital transformation projects and continuous growth of public/private cloud deployments helped lead the Ethernet switch market to steady year-over-year growth.

“A degree of price stabilization, particularly in the 10Gb Ethernet segment, helped lead to improved growth over 1Q16.”

Geographically, Latin America showed strongest growth for Ethernet switch market, with Chile being a standout performer. The country’s market saw 31.9% on an annualised basis in the quarter.

While Ethernet switch sales increased by 3.5% in North America, Western Europe saw 4% growth.

Czech Republic emerged as a bright spot for the market, as its revenue surged by 49.2% in the quarter.

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While its revenue from Middle East and Africa (MEA) region declined by 4.9%, Central and Eastern Europe also recorded contractions.

IDC data showed revenue from worldwide 10Gb Ethernet switch sales increasing by 3.2% to $2.16bn in the April-June quarter, with shipments posting a robust growth of 24.7%.

Revenue of 40Gb Ethernet stood at $750.3m million in the quarter, growing 33.2% year over year, while shipments grew 97.5% to a record 1.9 million ports.

IDC said: “10Gb and 40Gb Ethernet have been the primary drivers of the Ethernet switch market so far in 2016 as 25/100 Gb Ethernet start to emerge and will see volumes pick up in 2H 2016.”

In the router market, the larger service provider segment witnessed 3.6% decline, while enterprise routing saw 3.6% increase.

The firm said: “The latter will be a market to watch closely over the coming quarters as software-defined architectures start to take hold across the WAN, enabling enterprise network managers and service providers alike to benefit from these emerging capabilities.”

Cisco continued to remain as a dominant player in the Ethernet switching market with 56.8% share despite in a slight fall in share.

Hewlett Packard Enterprise posted 34.8% drop in its share due to split of the H3C business from the company.

While Huawei continued to perform well in both the Ethernet switch and the router markets, Arista had an excellent quarter with 35.4% growth year over year.

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