The worldwide Ethernet switch market (Layer 2/3) recorded $6.29 billion in revenue in the first quarter of 2018 (1Q18), up 10.9% year over year, according to IDC's Worldwide Quarterly Ethernet Switch Tracker and Worldwide Quarterly Router Tracker, while the worldwide total enterprise and service provider (SP) router market recorded $3.31 billion in revenue in 1Q18, a 1.4% decrease on a year-over-year basis.
"After modest gains in 2017, the Ethernet switch market started 2018 with a strong first quarter," said Rohit Mehra, vice president, Network Infrastructure at IDC. "There are two macro trends that contributed to growth: The emergence of next-generation software-based network intelligence platforms that add to the intrinsic value of networking, and the push by large enterprises, hyperscalers, and service providers to leverage faster Ethernet switching speeds for cloud rollouts. Both trends bode well for this industry moving forward."
Some highlights from IDC:
- The 1Q18 Ethernet switch market recorded its strongest growth in the Asia/Pacific (excluding Japan) (APeJ) region, which increased a solid 21.0% year over year. China had the region's most robust growth, rising 29.7% year over year to $769.8 million; Korea also posted strong 24.2% year-over-year growth. Central and Eastern Europe (CEE) was another standout region, growing 19.5%, with Poland up a strong 39.6% and the region's largest market, Russia, up 19.2%. The Middle East & Africa (MEA) region recorded 11.7% growth, while the United States, the world's largest market, was up 7.0% year over year to $2.44 billion. The Latin America (LA) region's growth continued to lag, up only 1.2%. Japan, meanwhile, dropped 2.0% year over year.
- 10Gb Ethernet switch (Layer 2/3) revenue increased 5.1%, coming in at $2.05 billion, while 10Gb Ethernet port shipments rose 41.6%.
- 40Gb Ethernet revenues were down 4.0% despite port shipments increasing 7.8%, reflecting ongoing price erosion in the market and unfavorable price performance ratios relative to 25Gb and 100Gb products.
- 25Gb revenue increased 176% year over year with port shipments growing 359% year over year in 1Q18.
- 100Gb revenue increased 83.8% year over year to $742.5 million and port shipments grew 117.7% year over year in 1Q18.
- 1Gb Ethernet revenues were up 5.4% in the quarter, with port shipments up 15.8%, which reverses a trend from last year and shows the interest in refreshing campus and branch networks.
- Overall, across all speeds, port shipments in 1Q18 rose 12.0% year over year.
- Cisco finished 1Q18 with a year-over-year increase of 7.6% in Ethernet switching revenues and a market share of 53.4%, down from its 55.0% share in 1Q17 and down from 58.9% in 1Q16.
- Huawei continued to perform well in both the Ethernet switch and the router markets on an annualized basis. Huawei's Ethernet switch revenue grew 41.2% year over year in 1Q18 for a market share of 8.1%, up from 6.3% in 1Q17. Hewlett Packard Enterprise's (HPE) Ethernet switch revenue grew 11.1% from 1Q17 to 1Q18 and its market share held steady at 6.0% during that time.
- Arista Networks performed well in 1Q18, with its Ethernet switching revenue rising 39.9% year over year, earning a market share of 6.5%, up from 5.1% in 1Q17.
- Juniper's Ethernet switch revenue fell 4.8% year over year in 1Q18, bringing its market share to 3.7% compared to 4.3% in 1Q17. Juniper also saw a 21.8% decrease in combined service provider and enterprise router revenues, with market share falling to 12.3% compared to 15.5% in 1Q17.
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