IDC has reported the worldwide Ethernet switch market (Layer 2/3) reached $5.66 billion in the third quarter of 2013 (3Q13), representing a year-over-year increase of 6.5%. On a sequential basis the 3Q13 increased 5.2%. IDC also reported the worldwide router market jumped 7.8% year over year, which was the highest annual growth rate seen in over two years. Sequentially, the router market grew 2.2%.
From a geographic perspective, IDC finds the 3Q13 results show the Ethernet switch market had its highest growth in Middle East & Africa (22.7% year over year) and very good growth in North America (12.0% year over year). Latin America and Asia/Pacific (excluding Japan) both grew in the mid-single digits while the Western Europe and Central & Eastern Europe regions were up in the 1-2% range. Meanwhile, Japan declined -13.4% year over year in 3Q13.
"The worldwide Ethernet Switch market is increasingly a tale of two market segments with different market dynamics: the enterprise campus segment, which includes the network edge, and the higher growth datacenter segment that is driving 10GbE and 40GbE as cloud rollouts continue to increase," said Rohit Mehra, Vice President, Network Infrastructure at IDC. "It's also worth noting that growth trends and overall regional performance in these segments vary widely among the regional and country markets across the various theaters, driven by a convergence of macro-economic issues and different states of maturity of datacenter and cloud deployments."
Other findings shared by IDC includes:
10Gb Ethernet switch (Layer 2/3) revenue increased 12.0% year-over-year while 10Gb Ethernet switch port shipments grew a strong 40.1% year over year to 4.97 million ports in 3Q13. 10GbE continues to be the primary driver of the overall Ethernet switch market, with the early stage 40GbE just starting to reach critical mass as a stand-alone segment.
The worldwide enterprise and service provider Router market also performed well in 3Q13, increasing 7.8% year over year and 2.2% sequentially in the quarter. Regionally, the results were quite uneven, ranging from more than 30% growth in Middle East & Africa and Central & Eastern Europe to a significant -26.3% decline in Japan. North America increased 14.8% year over year while Western Europe and Latin America were up high single digits. Asia/Pacific (excluding Japan) declined -1.5% year over year in 3Q13.
From a vendor perspective, Cisco's Ethernet switch (Layer 2/3) market share in 3Q13 held steady from last quarter at 62.3%. Cisco's market share in the fast-growing 10GbE market segment was 65.9% in 3Q13. HP's Ethernet Switch revenue increased 5.3% quarter over quarter and 6.5% year over year in 3Q13, on par with the overall market. HP's market share now stands at 9.4% in 3Q13.
"With the unified enterprise network edge gaining market traction and new applications for the Internet of Things continuing to emerge, Gigabit Ethernet (GbE) is expected to hold its own for the foreseeable future," said Petr Jirovský, Research Manager in IDC's Networking Trackers Group. "Of course, noticeable regional and country-level variances continue to be seen, so vendors are best advised to take those into consideration while working on their near to mid-term strategies."