Ethernet switch and router tracker markets register growth in Q2

Ethernet switch and router tracker markets register growth in Q2

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The worldwide Ethernet switch market has been going from strength to strength in recent years, and new figures have only emphasised this. According to the International Data Corporation (IDC) Worldwide Quarterly Ethernet Switch Tracker and Worldwide Quarterly Router Tracker, the market brought in $6.43 billion (£4.9 billion) in revenue during the second quarter of 2017.

This represented a significant 7.8 per cent year-on-year rise. It was also found that the worldwide total enterprise and service provider (SP) router market registered revenue of $3.92 billion in Q2, which was a rise of 6.7 per cent from the same time the previous year.

Regional performances

There were marked regional variations in performance, with the Middle East and Africa and Asia Pacific, excluding Japan, both recording a 16.8 per cent year-on-year increase in Q2 of 2017.

Europe also registered solid - if not quite as impressive - growth, seeing the market in both Western Europe and Central, and Eastern Europe increasing by 5.5 per cent in the year up to Q2 2017.

The North American market saw a 4.9 per cent rise in Q2, with the US growing by five per cent.

Other regions did not perform as well, with Japan seeing a relatively flat rise of just 0.1 per cent in Q2. Meanwhile, Latin America was the only region to see a fall in revenue, with the market contracting by 3.3 per cent.

However, even this area featured one bright spot, with Argentina growing by 49.1 per cent from Q2 of 2016.

Application explosion

Rohit Mehra, vice president of network infrastructure at IDC, said that the “application explosion” associated with digital transformation and continued proliferation of cloud build outs underpinned a strong market performance in Q2.

He added: “These transformational trends drive port shipments up, however the promise of emerging higher port speeds continually shifts the dynamics of Ethernet switching investments. Solid growth should continue throughout 2017, even as Ethernet switching and routing purchase behaviour trends may take some turns."

Ethernet switch revenue

The IDC report also found that 10Gb Ethernet switch (Layer 2/3) revenue increased by 4.2 per cent year over year in 2Q17, reaching a total of $2.24 billion, while 10Gb Ethernet switch port shipments grew 53.1 per cent in the year to Q2 of 2017, with over 13.8 million ports shipped in 2Q17.

Meanwhile, 40Gb Ethernet switch revenue did not fare as well, coming in at $681.5 million in Q2. This was a drop of 9.1 per cent over Q2 of 2016. Port shipments fell to just below 1.4 million, which was a 27.7 per cent decline. These falls were largely due to the rapid adoption of native 25Gb for top-of-rack Ethernet switch products by the larger public cloud and hyperscale providers.

Service provider routers

The worldwide enterprise and service provider router market saw growth of 6.7 per cent in Q2. This was the result of an 11.2 per cent increase in the larger service provider segment and a 7.1 per cent decrease in enterprise routing.

IDC said this would be a market to watch closely over the next few quarters “as software-defined architectures start to take hold across the WAN, with the potential for SD-WAN to disrupt traditional routing architectures and WAN transport services markets especially at the network edge”.


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