Market Insight

Best year for Ethernet switching since the recession

March 12, 2018

Matthias Machowinski Matthias Machowinski Directing Analyst, Enterprise Networks and Video

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Following are highlights from the first quarter 2018 edition of the IHS Markit Ethernet Switches Market Tracker, which includes data for quarter ended December 31, 2017. The report tracks unmanaged, web-managed, and fully managed fixed and chassis switches by port speed and revenue.

Worldwide Ethernet switch revenue grew 2 percent sequentially in the fourth quarter of 2017 (Q4 2017), to $6.7 billion, building off the gains from previous quarters. On a year-over-year basis, growth dipped to a more sustainable 7 percent in Q4 2017 after two quarters of double-digit growth. For the full-year 2017, revenue rose 8 percent, reaching nearly $25 billion—the strongest growth in seven years.

“Growth in the Ethernet switch market is being fueled by data center upgrades and expansion, as well as growing demand for campus gear due to improving business confidence,” said Matthias Machowinski, senior research director for enterprise networks and video at IHS Markit.

“The transition to 25/100GE architectures in the data center is in full swing, driving strong gains in 25GE and 100GE, while in turn bringing down the 40GE segment, which had its first annual decline,” Machowinski said. “Power over Ethernet is also growing once again, a sign of strengthening campus switching demand.”

Ethernet switch market highlights

  • 100GE port shipments are growing ferociously, increasing four-fold year-over-year, and reaching over 4 million ports in 2017; in contrast, 40GE ports suffered their first annual decline, falling off 9 percent
  • Growth in the North American Ethernet switch market came back in 2017 (+5 percent) as the economy and business confidence improved; EMEA returned to growth as well, but Asia Pacific remains the top growth region, primarily due to China
  • Vendor performance was a mixed bag in Q4 2017: market leader Cisco’s revenue declined 2 percent year-over-year, while number-two Huawei grew its revenue 24 percent and number-three HPE (Aruba) grew 13 percent
  • Huawei has been in the number-two spot since Q2 2017 and, for the first time, was number two for the entire year

Ethernet switch report synopsis

The IHS Markit quarterly Ethernet switch report provides worldwide and regional market size, vendor market share, forecasts through 2022, analysis and trends for unmanaged, web-managed and fully managed fixed and chassis switches by port speed (100ME, 1GE, 2.5GE, 10GE, 25GE, 40GE, 50GE, 100GE, 200GE, 400GE) and revenue.



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