Worldwide Ethernet switch market (Layer 2/3) revenues reached $5.4 billion in the second quarter of 2013 (2Q13), representing a year-over-year decline of -1.1%. On a sequential basis, the 2Q13 results increased 2.7% over a seasonally weaker first quarter. Meanwhile, the worldwide router market rebounded nicely in 2Q13 with year-over-year growth of 3.7%, which was the highest growth rate seen in two years. Sequentially, the router marked jumped 14.6% compared to 1Q13, according to the International Data Corporation (IDC) Worldwide Quarterly Ethernet Switch and Router Tracker.
From a geographic perspective, the second quarter results found the Ethernet switch market showing some strength in North America where it increased 4.9% year over year and 14.8% quarter over quarter, followed by Latin America with a small 0.9% year-over-year increase. These gains were not enough to fully offset the -5.6% and -6.2% year-over-year declines in Asia/Pacific and Europe, Middle East & Africa (EMEA), respectively.
"The worldwide Ethernet switch market is increasingly a tale of two market segments with different market dynamics - the enterprise campus segment, which includes the network edge, and the higher growth datacenter segment that is driving 10GbE and 40GbE growth as cloud rollouts continue to increase," said Rohit Mehra, Vice President, Network Infrastructure at IDC. "It's also interesting to note the increasing divergence in the performance of the regional and country markets across the various theatres, driven not just by macro-economic issues, but also the state of maturity of datacenter and cloud deployments."
10Gb Ethernet switch (Layer 2/3) revenue increased 12.9% year over year to $2.0 billion while 10Gb Ethernet switch port shipments grew a strong 52% year over year to 4.7 million ports in 2Q13. 10GbE continues to be the primary driver of the overall Ethernet switch market, with the early stage 40GbE starting to reach critical mass as a stand-alone segment.
The worldwide Layer 4-7 switching market returned to positive year-over-year growth in 2Q13 with its 2.4% sequential and 1.2% annual increase this quarter.
The worldwide enterprise and service provider router market performed well in 2Q13, increasing 3.7% year over year and 14.6% sequentially in 2Q13. As with the Ethernet switch market, North America was the best performing region this quarter with a strong 10.7% year-over-year increase. Latin America increased a healthy 6.4% year over year and EMEA also showed positive growth with a 1.0% year-over-year gain as macroeconomic conditions start to improve. On the other hand, Asia/Pacific router revenue declined -5.0% year over year.
From a vendor perspective, Cisco's Ethernet switch (Layer 2/3) market share in 2Q13 held steady from last quarter at 62.2%. Cisco's market share in the fast growing 10GbE market segment was 67% in 2Q13.
HP's Ethernet Switch revenue increased 10.4% quarter over quarter and was essentially unchanged from the second quarter one year ago. As a result, HP's market share increased to 9.4% in 2Q13, up from 8.7% last quarter and 9.3% in 2Q12.
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"As the market evolves towards a unified network edge in the enterprise, Gigabit Ethernet (GbE) is expected to hold its own for the foreseeable future as we look at new applications for the emerging Internet of Things," said Petr Jirovský, Senior Research Analyst in IDC's Networking Trackers Group. "Of course, regional and country-level variances are going to be pronounced, so vendors are best advised to factor those in while working on their near to mid-term strategies."
The IDC's Worldwide Quarterly Ethernet Switch and Router Tracker provides total market size and vendor shares for the Ethernet switch and router technologies in an easy-to-use Excel pivot table format. The geographic coverage for both the Ethernet switch market and the router market includes eight major regions (USA, Canada, Latin America, Asia/Pacific (excluding Japan), Japan, Western Europe, Central and Eastern Europe, and Middle East and Africa) and 58 countries. The Ethernet switch market is further segmented by speed (100Mb, 1000Mb, 10Gb, 40Gb), 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 provider, enterprise) and the measurements are in factory revenue, customer revenue, and unit shipments.
For more information about IDC's Worldwide Quarterly Ethernet Switch and Router Tracker, please contact Kathy Nagamine (knagamine@idc.com).
About IDC Trackers
IDC Tracker products provide accurate and timely market size, vendor share, and forecasts for hundreds of technology markets from more than 100 countries around the globe. Using proprietary tools and research processes, IDC's Trackers are updated on a semiannual, quarterly, and monthly basis. Tracker results are delivered to clients in user-friendly excel deliverables and on-line query tools. The IDC Tracker Charts app allows users to view data charts from the most recent IDC Tracker products on their iPhone and iPad.
From a geographic perspective, the second quarter results found the Ethernet switch market showing some strength in North America where it increased 4.9% year over year and 14.8% quarter over quarter, followed by Latin America with a small 0.9% year-over-year increase. These gains were not enough to fully offset the -5.6% and -6.2% year-over-year declines in Asia/Pacific and Europe, Middle East & Africa (EMEA), respectively.
"The worldwide Ethernet switch market is increasingly a tale of two market segments with different market dynamics - the enterprise campus segment, which includes the network edge, and the higher growth datacenter segment that is driving 10GbE and 40GbE growth as cloud rollouts continue to increase," said Rohit Mehra, Vice President, Network Infrastructure at IDC. "It's also interesting to note the increasing divergence in the performance of the regional and country markets across the various theatres, driven not just by macro-economic issues, but also the state of maturity of datacenter and cloud deployments."
10Gb Ethernet switch (Layer 2/3) revenue increased 12.9% year over year to $2.0 billion while 10Gb Ethernet switch port shipments grew a strong 52% year over year to 4.7 million ports in 2Q13. 10GbE continues to be the primary driver of the overall Ethernet switch market, with the early stage 40GbE starting to reach critical mass as a stand-alone segment.
The worldwide Layer 4-7 switching market returned to positive year-over-year growth in 2Q13 with its 2.4% sequential and 1.2% annual increase this quarter.
The worldwide enterprise and service provider router market performed well in 2Q13, increasing 3.7% year over year and 14.6% sequentially in 2Q13. As with the Ethernet switch market, North America was the best performing region this quarter with a strong 10.7% year-over-year increase. Latin America increased a healthy 6.4% year over year and EMEA also showed positive growth with a 1.0% year-over-year gain as macroeconomic conditions start to improve. On the other hand, Asia/Pacific router revenue declined -5.0% year over year.
From a vendor perspective, Cisco's Ethernet switch (Layer 2/3) market share in 2Q13 held steady from last quarter at 62.2%. Cisco's market share in the fast growing 10GbE market segment was 67% in 2Q13.
HP's Ethernet Switch revenue increased 10.4% quarter over quarter and was essentially unchanged from the second quarter one year ago. As a result, HP's market share increased to 9.4% in 2Q13, up from 8.7% last quarter and 9.3% in 2Q12.
This chart is intended for public use in online news articles and social media. Instructions on how to embed this graphic are available by clicking here.
"As the market evolves towards a unified network edge in the enterprise, Gigabit Ethernet (GbE) is expected to hold its own for the foreseeable future as we look at new applications for the emerging Internet of Things," said Petr Jirovský, Senior Research Analyst in IDC's Networking Trackers Group. "Of course, regional and country-level variances are going to be pronounced, so vendors are best advised to factor those in while working on their near to mid-term strategies."
The IDC's Worldwide Quarterly Ethernet Switch and Router Tracker provides total market size and vendor shares for the Ethernet switch and router technologies in an easy-to-use Excel pivot table format. The geographic coverage for both the Ethernet switch market and the router market includes eight major regions (USA, Canada, Latin America, Asia/Pacific (excluding Japan), Japan, Western Europe, Central and Eastern Europe, and Middle East and Africa) and 58 countries. The Ethernet switch market is further segmented by speed (100Mb, 1000Mb, 10Gb, 40Gb), 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 provider, enterprise) and the measurements are in factory revenue, customer revenue, and unit shipments.
For more information about IDC's Worldwide Quarterly Ethernet Switch and Router Tracker, please contact Kathy Nagamine (knagamine@idc.com).
About IDC Trackers
IDC Tracker products provide accurate and timely market size, vendor share, and forecasts for hundreds of technology markets from more than 100 countries around the globe. Using proprietary tools and research processes, IDC's Trackers are updated on a semiannual, quarterly, and monthly basis. Tracker results are delivered to clients in user-friendly excel deliverables and on-line query tools. The IDC Tracker Charts app allows users to view data charts from the most recent IDC Tracker products on their iPhone and iPad.
