2024/03/20 10:58:03

Ethernet LAN Switches Global Market

Network equipment (Global Market)

Network equipment (Global Market)

2023: Switch Market Growth by 20.1% to $44.2 Billion

In 2023, revenue from sales of Ethernet switches on a global scale increased by 20.1% compared to the previous year and amounted to approximately $44.2 billion. This is stated in the IDC study, the results of which were published on March 8, 2024.

Analysts note that the demand for switches in 2023 increased significantly due to several factors. In particular, against the backdrop of the rapid development of artificial intelligence and high-performance computing, data center (data center) operators and cloud platforms are modernizing their infrastructures, which requires more productive network equipment. In addition, companies are purchasing next-generation switches to support new workloads and improve the efficiency of business operations.

Global Ethernet Switch Revenue Up 20.1%

Revenue in the data center segment in 2023 increased by 13.6% compared to the previous year. The share of such devices in total sales amounted to 41.5% in monetary terms. Demand for 200/400GbE standards products rose 68.9% year-on-year. Deliveries of 100GbE solutions, which account for approximately 46.3% of all revenue in the data center-switches segment, increased by 6.4% in 2023. Direct ODM sales continue to be an important part of the data center segment: growth in 2023 was at 16.2%, and the total contribution to revenue in the relevant sector is estimated at 14.3%.

In the segment of Ethernet switches that do not belong to data centers, revenue in 2023 increased by 25.2% compared to 2022. Network equipment suppliers are increasing sales thanks to delayed orders and increased availability of components, the supply of which was limited due to the COVID-19 pandemic. Sales of 1GbE standard devices, which accounted for 56.5% of the revenue of the non-data center segment, grew by 24.2% year-on-year in 2023. The demand for 10GbE solutions rose by 5.3% compared to 2022. However, by the end of 2023, the number of orders for new products decreased as customers increased their stocks of devices.

From a geographical point of view, the Ethernet switches market USA in grew by 28.8% for the whole of 2023. In Western Europe, sales increased by 19.3%, in Central and Eastern Europe - To Europe by 20.7%, in the Asia-Pacific region (with the exception of Japan and) - China by 15%. At the same time, the PRC recorded a decline of about 4% compared to 2022.

Cisco became the largest player in the global Ethernet switch market in 2023, increasing revenue in this sector by 22.2% compared to 2022. As a result, the share of this company amounted to 43.7%. Arista Networks is in second place in the ranking, with annual income up 35.2% and a share of 11.1%. Huawei closes the top three: this company increased sales compared to 2022 by 10.6% and occupied 9.4% of the industry. Next comes HPE, which increased the implementation of Ethernet switches by 67.6% on an annualized basis: the company, like Huawei, has a share of 9.4%. The H3C is in fifth position in the ranking, but its sales decreased year-on-year by 6.3%: the share of this company at the end of 2023 was recorded at 4.2%.

The global Ethernet switch market has shown good dynamics in 2023. In the data center segment, businesses and service providers are deploying increasingly powerful switches to support fast-growing AI workloads, says Vijay Bhagavath, vice president of research at IDC.^[1]

2022

The volume of the global market for routers and switches for telecom companies for the year is estimated at $14 billion. Leaders

The volume of the global industry of routers and switches for service providers (SP) in 2022 exceeded $14 billion. This was announced on March 14, 2023 by the analytical firm Dell'Oro Group. Read more here.

Growth of 18.7% to $36.5 billion

In 2022, global revenue from the sale of corporate-class switches rose by 18.7% compared to 2021, reaching $36.5 billion. This is evidenced by the results of a study published by IDC on March 9, 2023.

Analysts divide the switch segment into two categories: data center devices and other corporate products. In 2022, sales growth was noted in both groups. At the same time, revenue from shipments of solutions for data centers rose on an annualized basis by 22.6%, and the number of ports sold increased by 12.2%. In the second category, sales increased by 15.7% compared to 2021, while the number of delivered ports increased by 12.2%.

Global revenue from enterprise-class switches reached $36.5 billion

Revenue in the 200GbE/400GbE standard switch segment reportedly jumped more than 300% in 2022 compared to the previous year. This is explained by the rapid development of hyperscale platforms and large data centers. 100GbE devices showed revenue growth of 22% on an annualized basis, and 25GbE/50GbE solutions - by 29.8%. The segment of 1GbE models recorded an increase in sales by 12.6%. 10GbE switches showed a 0.4% increase in revenue compared to 2021.

From a geographical point of view, the Ethernet switch market grew in most regions of the world in 2022. In the Asia-Pacific region (excluding Japan and China), sales increased by 17.5% compared to 2021. In China, shipments in monetary terms rose by 9.2%. At the same time, Japan recorded a drop of 8.6%. In the United States, sales on an annualized basis rose by 26.2%, in Canada - by 17%. The Latin American market increased by 39.6% compared to 2021. In Western Europe, enterprise customer costs for switches increased by 19.7%, in the Middle East and Africa - by 19.9%. In Central and Eastern Europe, against the background of the current geopolitical situation, spending in 2022 decreased by 2.8% compared to 2021.

The ranking of leading switch providers is topped by Cisco with a 43.3% share by the end of 2022. Huawei is in second place with a score of 10.3%, and Arista Networks closes the top three with 9.9%. The top five included H3C and HPE with an indicator of 5.4% each.

The IDC report also examines the market for enterprise-class routers. At the end of 2022, revenue here reached $16.5 billion, which is 3.9% more compared to 2021. In the segment of routers for service providers, an increase of 1.3% was recorded, and revenue from the sale of other types of devices rose on an annualized basis by 12.9%. Cisco Corporation received 35.1% of total revenue in the enterprise-class router market in 2022. Another 28.4% went to Huawei, approximately 2.2% to H3C.

Geographically, the US router market in 2022 grew by 17%, in Canada - by 1.4%. Sales in Latin America rose by 16.7% compared to 2021. At the same time, in the Asia-Pacific region (excluding Japan and China), sales fell by 3.9%. In Japan, shipments of routers in monetary terms in 2022 rose only by 0.3%. In the Chinese market, demand for devices decreased by 6.7% compared to 2021. Revenue in Western Europe increased 5.2% year-on-year. The market of Central and Eastern Europe, including Russia, showed negative dynamics: here a drop in revenue was recorded compared to 2021 by 21.2%. The Middle East and Africa region increased sales by 3.7% in annual terms.^[2]

2021: Switch sales up 9.7% to $30.7 billion

2021 ended for the network equipment market with steady growth after the decline in 2020. Thus, sales of Ethernet switches in 2021 increased by 9.7% compared to 2020 and amounted to $30.7 billion. In the segment of routers, a 6.5 percent rise was registered, up to $15.9 billion. Analysts IDC published such data on March 10, 2022.

As noted in the study, sales of switching equipment increased in most regions. Thus, in the United States at the end of 2021, there was an increase of 7%, in Latin America - by 7.7%, in the Asia-Pacific region - by 15%, in China - by 17.5%. A drop in demand was observed in Canada (-1%) and Japan (-0.8%), as well as in the Middle East and Africa (-5.4%).

The global market for network equipment has grown significantly after the recession

In Western Europe, the volume of the switch market in 2021 increased by 17.7%. At the same time, in Central and Eastern Europe (this includes Russia), the dynamics turned out to be almost zero.

Companies of all sizes around the world consider networks a critical component of their digital infrastructure strategies, and that's why we're seeing steady growth in the Ethernet switch market, "says Brad Casemore, vice president of research at Datacenter and Multicloud Networks. - The Ethernet switch market will face challenges in 2022, primarily due to a shortage of components affecting supply chains, as well as economic uncertainty related to geopolitical conflict. These negative factors in the coming quarters will offset the ongoing construction of high-speed data center networks by hyperscale operators and other cloud providers.

IDC analyst Petr Jirovsky noted that the Ethernet switch market showed strong growth in the fourth quarter, thanks to which the market grew significantly in the whole of 2021. Various factors continue to impact the Ethernet switch market, including the adoption of 400 GbE ports in the data center segment and the continued growth of the high-speed Ethernet switch category in the corporate sector, he said.

The balance of power in the network equipment market remains stable. As before, the top five suppliers include Cisco, Huawei, Arista Networks, H3C Technologies and HPE. At the end of 2021, analysts estimated the shares of these companies in the switch segment at 45.3%, 10.2%, 7.6%, 6.1% and 6.1%, respectively.

2020: Switch and Router Market Falls 3.5% to $27.8 Billion - IDC

The volume of the world market Ethernet-switchboards routers and at the end of 2020 amounted to $27.8 billion, having decreased by 3.5% compared to 2019. Such data led to a research company. IDC More. here

2019: Network Equipment Market Finds Itself in the Black

The volume of the global network equipment market in 2019 showed growth, as evidenced by data from IDC analysts. They estimated that annual sales of Ethernet switches (Layer 2/3) reached $28.8 billion, an increase of 2.3%. In the segment of routers, a slight rise was registered - by 0.4% to $15.5 billion. Moreover, deliveries of routers to telecom operators in monetary terms sank by 1.5%, and shipments of corporate-class equipment increased by 6.9%.

The study says that the router market in the Asia-Pacific region sank 1.1% in 2019 compared to 2018. In the Middle East and Africa, on the contrary, a 7.2% rise was recorded, and in the United States - a decline of 3.1%. The American market remains the largest destination for routers.

Switch Market Leaders, IDC Data

At the end of 2019, sales of switches in the countries of Central and Eastern Europe (to this region Russia) increased by 1.7%. The data on the Russian market are not given in the study. Of this region, only mention is made: Poland here annual sales of switches jumped by 11.7%.

In the Asia-Pacific region (excluding Japan), sales of switches in 2019 increased by 1.5%, in China - by 3.6%, in Japan - by 4.2%. Countries in the Middle East and Africa recorded a rise of 9.8%, including 6.9 percent growth in the UAE .

The volume of the Western European switch market in 2019 decreased by 2.9% largely due to Germany and Britain, where sales sank by 5.5% and 6.8%, respectively. In Latin America, sales declined 2.6%, while in the United States they rose 4.5%.

According to Rohit Mehra, vice president of research for the IDC network infrastructure market, at the end of 2019, sales of network equipment on a global scale were weak due to several factors, including macroeconomic problems, such as the US-China trade war and Britain's exit from the European Union.

According to the expert, despite all the problems, the company still considers priority investments in digital platforms that help them transform their business and keep pace with competitors. Ultimately, this will spur spending in the network equipment market in the long term, Mehra is sure.

The expert also added that the spread of the new coronavirus COVID-19 one did not affect the network equipment market in 2019, but the epidemic will affect in 2020, so weak indicators in the market will continue.

The size of the global network equipment market in 2019 showed growth, as evidenced by data from IDC analysts

Cisco remained the largest manufacturer of network equipment in 2019, having recorded a share of 37.2% in the router market. At the same time, the revenue of the American company in the market under consideration decreased by 3.4%.

In second place in terms of sales of switches and routers is the Huawe i, which in 2019 accounted for 29.8% of the revenue from the sale of routers. The income of the Chinese company from the sale of such equipment increased by 4.1%.

Arista Networks ended 2019 with a 7 percent market share in switching equipment, up from 6.5 percent a year earlier. Hewlett Packard Enterprise (HPE) experienced a 9.1% drop in sales of such devices, reducing the company's market share from 6.1% to 5.4%.

The IDC study also mentions Juniper Networks, which in 2019 reduced sales of Ethernet switches by 7.2%, and revenues in the router segment decreased by 11.7%. Analysts noted a 13.2% share of Juinper Networks in the carrier router market, while in 2018 the figure was measured at 14.7%.^[3]

2018: Network equipment sales up 7% to $44bn

In 2018, the global market for switches and routers exceeded $44 billion, an increase of 7% compared to 2017. This is evidenced by data from Synergy Research Group, which was released on February 26, 2019. Global Ethernet switch costs increased by 8%.

2017: IDC names switch market leaders

On March 5, 2018, the analytical company International Data Corporation (IDC) presented the results of a study of the global network equipment market.

According to experts, in 2017, sales of Ethernet switches (Layer 2/3) on a global scale exceeded $25.7 billion, an increase of 5.4% compared to 2016.

The largest growth rate of the switch market was recorded in the Asia-Pacific region, where the rise was measured by 11.3%. At the same time, most of such equipment is still sold on the American market, the volume of which rose by almost 3% in 2017.

The Ethernet switch market continues to show strong growth with network renewal projects and investments in fast-growing campuses and data centers. In the market of routers used by operators and companies, the dynamics demonstrated by vendors begin to change as end users strive for high-speed cloud communications, said IDC analyst Petr Jirovsky.

The report lists the largest manufacturers of switches:

Cisco (54,9%);
Huawei (8,3%);
Hewlett Packard Enterprise (5,9%);
Arista Networks (5,6%);
Juniper Networks (share not specified).^[4]

Major Switch Manufacturers, IDC Data

2016: Changes in the top three producers

On March 9, 2017, the analytical company IDC released brief results of a study of the global network equipment market. There has been one change in the top three switch manufacturers, with Huawei moving up to second place ahead of Hewlett Packard Enterprise (HPE).

According to experts, in 2016, sales of Ethernet switches (Layer 2/3) on a global scale reached $24.4 billion, which is 2.4% more than a year earlier.

The balance of power among the largest manufacturers of switches, IDC data from the fourth quarter of 2015 to the fourth quarter of 2016

As the Ethernet switch market reaches a high level of maturity in hardware segments with ports from 1 to 10GbE, it is increasingly showing an accelerated transition to cheaper ports, especially in data centers, "comments IDC analyst Rohit Mehra. - While port shipments continue to grow, it is revenues from sales of the fastest equipment that still support the market.

At the end of 2016 Cisco , it remained the largest supplier of switching equipment, although the company's market share decreased from 60.6% to 57%. Huawei climbed to second place with a 7 percent presence rate. The third position dropped (HPE 6.4%). Next are and. Arista Networks Juniper Networks^[5]

2015: Up 3%

In April 2016, Synergy Research Group analysts published the results of a study of the global network equipment market. Its volume has increased largely due to the growing demand for switches among companies.

Experts estimate that in 2015, sales of routers and switches reached $41 billion, an increase of 3% compared to the previous year. Synergy Research notes that the main contribution to this rise was made by the segment of corporate switching equipment, which accounted for almost 60% of the market in question. The next largest segment is routers for telecom operators, and then there are routers for the needs of organizations and enterprises.

Cisco controls 56% of the global network equipment market

In 2015, Cisco remained the leader in the global network equipment market, recording a 56 percent stake in the asset. In 2014, the same indicator took place. The closest pursuers of Cisco are Juniper Networks, Hewlett Packard Enterprise (HPE), Huawei and ALU, whose shares were measured at 6-8%. Further there is a group of vendors with shares not exceeding 2%.

Despite the difficulties on various fronts, Cisco successfully continues to occupy the position of the dominant supplier of switches and routers, having revenues that are about seven times higher than the nearest competitor, "says Jeremy Duke, an analyst at Synergy Research Group. - This dominance is manifested to a large extent in the corporate sector, where among vendors only HPE has a double-digit market share. ALU, Juniper and Huawei are confidently advancing in the carrier router segment, their shares are double-digit. Through cooperation with Ericsson, Cisco can strengthen the channel of sales of carrier solutions and increase its presence in this segment.

2014: Sales record

On March 2, 2015, IDC published a research report on the global market for switching equipment for local networks.

At the end of 2014, global sales of Ethernet switches (Layer 2/3) increased by 3.9% compared to the previous year. Experts did not give the absolute value for the year, but named the indicator for the last calendar quarter - $6.2 billion. There has never been such a large market volume in a three-month period before.

If the demand for switches has grown, then for routers, on the contrary, it has fallen. In 2014, 0.6% less routers were sold worldwide than in 2013. In October-December 2014, sales of these network devices increased by 2.5% on an annualized basis, compared to the previous quarter, the rise was 5.6%.

Global Switch Market Records Sales Record

The main catalyst for the growth of switch sales, Vice President of Research for the Network Infrastructure Market IDC Rohit Mehra (Rohit Mehra) calls the solutions 10GbE. The size of their implementation reached $2.3 billion in the final three months of 2014, which is 5.2% more than a year earlier. Port deliveries in this segment increased by 24.4% to 6.8 million units.

The highest growth rates in the switching equipment market are demonstrated by 40GbE devices, which, as Mehra explained, is due to the way data center owners are striving to increase site capacity in the face of growing demand for corporate and cloud applications. Vendors' revenue from sales of 40GbE equipment jumped by more than 100% and exceeded $520 million in the fourth quarter of 2014.

Ethernet 1Gb solutions remain important for corporate networks, but the trend of falling prices may negatively affect this segment, Rohit Mehra added.

The list of the largest manufacturers of switches has not changed, according to the results of 2014, it is as follows: Cisco, HP, Huawei, Juniper Networks and Arista Networks. The leader of Cisco earned $14.2 billion on switches, and in the final quarter, the vendor's market share amounted to 61.1%, as a year earlier. HP's closest pursuer grew from 9.2% in October-December 2013 to 9.5% a year later.

2011

Fourth quarter of 2011

The global Ethernet network switch market in the fourth quarter of 2011 grew by 1.2% compared to the previous quarter and by 5.5% on an annualized basis.

In the fourth quarter of 2011, the global Ethernet switching market reached a record revenue of $6.06 billion, thereby showing growth of 5.5% year-on-year and 1.2% in the quarter. Meanwhile, according to a study by Worldwide Quarterly Enterprise Networks Tracker of International Data Corporation (IDC), in the fourth quarter of 2011, the global router market was marked by a decline of 2.3% on an annualized basis. The preliminary results of the fourth quarter also show a strong rise in the Ethernet switch market in Latin America, Europe, the Middle East, Africa (EMEA) and in the Asian/Pacific regions, which grew by 29.0%, 11.9% and 8.4%, respectively. On the contrary, in the North American market, after very strong sales of the third quarter, in the fourth quarter of 2011 there was a decrease of 2.0% on an annualized basis.

According to Rohit Mehra, head of corporate communications infrastructure research at IDC, the recovery of the corporate network market in the second half of 2011 is a very encouraging phenomenon for the market as a whole and most market segments. The regions are also making their own adjustments. "In 2012, the Ethernet switch market is expected to grow moderately: Gigabit Ethernet is returning to its ascent trajectory, and 10GbE and 40GbE devices are expected to show growth due to data centers and the deployment of networks in science and college campuses," the analyst said.

During 2011, the global market for Layer 2-3 Ethernet switches was quite expressionless compared to 2010 results. Revenues amounted to $21.1 billion, while the results in the global router market are better - an increase of 5.7% since 2010. Revenue from the sale of 10GbE switches (level 2-3) increased on an annualized basis by 32.9% and 5.1% compared to the previous quarter. Deliveries of 10GbE ports rose to a record 2.8 million units. per quarter. Overall, in 2011, 10GbE switch market revenues grew by 26.5% in 2010, while port shipments more than doubled in the same period.

The global router market in the fourth quarter showed a growth of 7.3% on a quarterly basis, but on an annual basis showed a decrease of 2.3%. According to IDC analysts, these are good indicators, taking into account the exceptional results of the fourth quarter of 2010. The strong growth of the regional markets of Latin America (16.6%) and the Asia-Pacific region (15.1%) was offset by a decline in the regions of North America and EMEA, where the decline in the fourth quarter of 2011 was 16.4% and 3.7%, respectively, on an annualized basis.

Speaking of suppliers, IDC notes Cisco: the market share of its Ethernet switches (level 2-3) in the fourth quarter of 2011 reached 64.3% - this figure has been significantly improved since the beginning of the year. Cisco is still strong in the 10GbE device segment, where it now owns 69.5% of the market in the fourth quarter of 2011.

The improvement in market performance in the fourth quarter of 2011 was significant, said Petr Jirovský, senior analyst at IDC Networking Trackers research group, in that it helped the switch market end the year on a major note and increase port shipments. "The switch market (level 2-3) in the fourth quarter of 2011 grew by 1.2% and 5.5%, respectively, compared to the previous year, and this bodes well for the market as a whole," the analyst emphasized.

Q3 2011

The global Ethernet switch market reached a record revenue of $5.9 billion in the third quarter of 2011, showing significant growth of 6.1% on an annualized basis and 10.9% on a quarterly basis.

Meanwhile, in the third quarter of this year, the global router market also has an increase of 2.9% on an annualized basis, IDC said in its quarterly global survey of corporate networks Worldwide Quarterly Enterprise Networks Tracker .

The final results of the third quarter of 2011 show excellent market sales of switches in the Asia-Pacific region, which grew by 27.8% on an annualized basis and currently account for 25.8% of global revenues.

Rohit Mehra, head of enterprise communications infrastructure research at IDC, noted, despite weaker expectations in the first half of 2011, that the Ethernet switch market recovered in the third quarter based largely on healthy demand in the Asia-Pacific region. "In China, significant sales growth, by 44.1%, exceeded the growth rate of the third quarter of 2010, but other countries in the region are also showing exceptional growth. Australia, Korea and India, for example, ended the quarter with an annual profit of 27% -30% and thereby reaffirmed the further relevance of the development of network infrastructure in corporate IT. "

Revenues from the sale of 10 GB Ethernet switches on an annualized basis increased by 29.9% and 99.0% in port supplies, due to the ongoing development of networks in data centers and science towns. Deliveries of 10 GB Ethernet ports increased to a record 2.09 million ports per quarter.

The global router market, after several quarters of growth in the third quarter on an annualized basis, grew by only 2.8%. This was due to a 9.4% annual growth rate in Asia-Pacific, which was offset by a less significant 0.5% growth rate in both Americas, Europe, the Middle East and Africa (EMEA).

Regional sales

Among the major countries, outstanding indicators were shown: China, whose market grew by 12.9% on an annualized basis, Japan - by 10.9%, Australia with growth of 13.2% and Germany with an increase of 8.4% on an annualized basis. In contrast, negative macroeconomic conditions had an impact on results in Italy, Portugal and Greece, where revenue declined more than 20% year-on-year, as well as Spain, where revenue shrank more than 13% for the year. The service delivery segment, which accounted for 73.9% in the third quarter, grew 5% year-on-year, while the corporate segment found a decline of 2.8%.

Leading companies

The company's Ethernet switch market share (level 2/3) Cisco in the third quarter, which included a powerful July, reached 66.5%, which shows a significant rise from 63.8% of the second quarter of 2011. Cisco's market share has now reached the highest level seen by analysts during the year. The company is still very strong in the 10 GB Ethernet switch segment, where it holds more than 73% of the market in the third quarter of 2011.

Gigabit Growth Trends

According to the conclusion of Petr Zhirovski (Petr Jirovský), senior analyst at IDC Networking Trackers Group, in the broader understanding of the Ethernet switch market, revenue from Gigabit devices increased by 2.7% on an annualized basis, and port deliveries reflect a high growth rate of 27.1% as the transition from Fast Ethernet technology to Gigabit Ethernet continues. "Gigabit Ethernet devices now account for 61.6% of the total Ethernet switch market revenue and 46.9% of port supply," he noted.