The worldwide Ethernet switch market reached record revenues of $5.9 billion in the third quarter of 2011 (3Q11), representing strong growth of 6.1 percent year over year and 10.9 percent quarter-over-quarter. Meanwhile, the worldwide router market also grew but at 2.9 percent year over year in 3Q11, according to the International Data Corporation (IDC) Worldwide Quarterly Enterprise Networks Tracker. The final 3Q11 results show exceptional Ethernet switch market performance in the Asia/Pacific region, which increased 27.8 percent year over year and now accounts for 25.8 percent of worldwide revenue.
"After a weaker than expected first half of 2011, the Ethernet switch market rebounded strongly this quarter largely on the basis of healthy demand in the Asia/Pacific region," said Rohit Mehra, director, Enterprise Communications Infrastructure at IDC. "China experienced remarkable 44.1 percent year-over-year growth this quarter, but other countries in the region also showed exceptional growth. Australia, Korea, and India, for example, all ended the quarter with 27-30 percent annual gains, further reaffirming the continued relevance of network infrastructure within enterprise IT."
10GbE switch revenue increased 29.9 percent year over year and 99.0 percent in port shipments due to continued adoption in datacenters and campus core deployments. 10GbE port shipments grew to a record 2.09 million ports in the quarter.
The worldwide router market, after several quarters of high single- and low double-digit growth, increased just 2.8 percent year over year in 3Q11 as the 9.4 percent year-over-year increase in Asia/Pacific was offset by less than 0.5 percent growth in both Americas and Europe, Middle East and Africa (EMEA). Among the major countries, the outperformers included China, which increased 12.9 percent year over year, Japan up 10.9 percent year over year, Australia with 13.2 percent year-over-year growth, and Germany with a gain of 8.4 percent year over year. On the other hand, negative macroeconomic conditions impacted the results in Italy, Portugal, and Greece, which were all down more than 20 percent year over year, and Spain, which declined more than 13 percent year over year. The service provider segment of the router market, which accounted for 73.9 percent in 3Q11, grew 5.0 percent year over year, while the enterprise segment actually declined 2.8 percent on an annual basis.
From a vendor perspective, Cisco's Ethernet switch (Layer 2/3) market share in 3Q11, which includes the strong month of July, the last month of Cisco's fiscal year, came in at 66.5 percent reflecting a significant rebound from the 63.8 percent in 2Q11. Cisco's market share is now at the highest level we have seen over the last year. On a relative basis, Cisco continues to be strong in the 10GbE segment where it holds more than 73 percent of the market in 3Q11.
"In the broader Ethernet switching market, Gigabit Ethernet revenue increased 2.7 percent year over year and port shipments experienced strong growth of 27.1 percent as the transition from Fast Ethernet to Gigabit Ethernet continues," said Petr Jirovský, senior research analyst in IDC’s Networking Trackers Group. "Gigabit Ethernet now commands a 61.6 percent share of the overall Ethernet switching market revenue and 46.9 percent of port shipments."
The IDC's Worldwide Quarterly Enterprise Networks Tracker provides total market size and vendor shares for the Ethernet switch and router technologies in Excel format. The geographic coverage for both the Ethernet switch and the router markets includes eight major regions (USA, Canada, Latin America, AP excluding Japan, Japan, Western Europe, Central and Eastern Europe, Middle East and Africa) and 52 countries. The Ethernet switch market is further segmented by Speed (100Mb, 1000Mb, 10Gb), Form Factor (Fixed Managed, Fixed Unmanaged, Modular), and Layer (L2, L3, L4-7). Measurement for the Ethernet Switch market is provided in factory revenue, customer revenue, and port shipments. The Router market is further split by Product Class (High-End, Mid-Range, Low-End, SOHO) and Deployment (Service Provide, Enterprise) and the measurement is in factory revenue, customer revenue, and unit shipments.