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Data Center Network: Mobile Communications Drives Market for Ethernet Switches

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March 03, 2011

Data Center Network: Mobile Communications Drives Market for Ethernet Switches

By Ashok Bindra, TMCnet Contributor


Market research firm Infonetics Research recently released vendor share rankings and market forecasts for the fourth quarter 2010 (4Q10) for Ethernet switches, wireless LAN (WLAN) equipment and enterprise routers. The data points to recovery in the wired and wireless Ethernet switching sales to data centers, primarily driven by mobile communications in the corporate and enterprise environments.


In a statement, Matthias Machowinski, directing analyst for enterprise networks and video at Infonetics Research (News - Alert), said "Wired and wireless Ethernet switching sales took a hit during the recession, but now they're back stronger than ever. The spring-back is partially due to pent-up demand and the need to upgrade networks to eliminate congestion. But another factor at play is the realization by many enterprises that building out their network coverage, including mobile access, improves communication among employees and access to IT applications, and that has a profound effect on productivity and competitiveness." Consequently, the 4Q10 Ethernet switch revenue inched up 1 percent from 3Q10, enough to set a new quarterly sales record of $4.79 billion, according to Infonetics. The sales also set a new annual high of $18.8 billion in 2010, nearly $1 billion higher than the pre-recession high in 2008. The market watcher also reported that in the next few quarters, 1G ports will begin out-shipping fast Ethernet for the first time, an important inflection point.

Speaking of speed, the industry’s lowest latency scores went to Force10 Networks’ 10 GbE switch based on an independent benchmarking study. The Lippis/Ixia (News - Alert) testing concluded that Force10’s access switch delivers up to 70 percent lower latency than competitive products in data center network test.

Amongst the vendors, Juniper was the shining star in 4Q10, with a 21 percent sequential jump in Ethernet switch revenue, driven by strong data center sales. Juniper also tripled its Ethernet switch sales in 2010, moving into a solid number 3 position. Similarly, Cisco (News - Alert), the market leader by far, lost market share during the recession, but managed to gain it all back, with revenue share up a full point in 2010 (70.4 percent) over pre-recession 2008.

Likewise, the worldwide WLAN equipment market grew 10 percent in 4Q10 over 3Q10, to $769 million, continuing the upward trend. The market research firm’s study indicates that WLAN revenue is up 28 percent as compared to the fourth quarter in 2009. For the year, WLAN sales are up 23 percent to $2.7 billion, driven by the fundamental trend towards enterprise mobility and wired LAN and WLAN convergence.

According to Infonetics, for the first time, 802.11n access points (APs) outnumbered legacy a/b/g APs in 4Q10, a shift that is helping support ASPs across most categories. The report shows that in 4Q10, Cisco maintained its lead in worldwide WLAN equipment revenue (excluding WiFi (News - Alert) phones), followed by Aruba Regarding enterprise routers, worldwide revenue rose 7 percent to $920 million in 4Q10 over 3Q10. However, unit sales were down both sequentially and from a year ago, reflecting the slow pace at which businesses are expanding despite the fact that the economy is returning to health, said Infonetics.

Unlike record-breaking sales of Ethernet switches and WLAN equipment, enterprise routers were disappointing. For the year, the enterprise router market grew 11 percent to $3.4 billion in 2010, sharply lower than pre-recession revenues in 2008 ($4.3 billion). HP finished strong in 4Q10, with enterprise router sales up more than 50 percent from 3Q10. Meanwhile Cisco's 2010 enterprise router revenue was off 18 percent from 2008. Nevertheless, Cisco managed to pick up market share (78.2 percent) in 2010 as other vendors declined, according to Infonetics’ research.


Ashok Bindra is a veteran writer and editor with more than 25 years of editorial experience covering RF/wireless technologies, semiconductors and power electronics. To read more of his articles, please visit his columnist page.

Edited by Patrick Barnard







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