IDC's Worldwide Quarterly Enterprise Networks Tracker Shows Strong Ethernet Switch Results; Router Market Also Grows

FRAMINGHAM, Mass., May 21, 2012 – The worldwide Ethernet switch market (Layer 2/3) reached $5.1 billion in the first quarter of 2012 (1Q12), representing strong growth of 7.4% year over year. Meanwhile, the worldwide router market increased a more modest 2.8% year over year in 1Q12, according to the International Data Corporation (IDC) Worldwide Quarterly Enterprise Networks Tracker. The preliminary 1Q12 results also show strong Ethernet switch market growth in Latin America, which increased 24.6% year over year, and a solid performance in Asia/Pacific and in North America, up 9.2% and 7.1% year over year respectively. On the other hand, Europe, Middle East, and Africa (EMEA) was relatively soft and increased just 4.2% year over year in 1Q12.

"The positive market performance in the first quarter of 2012 speaks well to the network infrastructure needs of enterprise IT as it embraces cloud technologies," said Rohit Mehra, director, Enterprise Communications Infrastructure at IDC. "While Gigabit Ethernet is alive and well at the network edge supporting a myriad of applications, it is 10GbE along with the emerging 40GbE that will continue to drive incremental growth in datacenter and campus core deployments."

10GbE switch (Layer 2/3) revenue increased 20.6% year over year and 10GbE port shipments grew to a record 2.8 million ports in the quarter and continue to drive the overall market growth.

The Layer 4-7 switching market in 1Q12 also grew at an impressive 21.1% year over year to reach $388.7 million, although it stayed relatively flat over the previously strong seasonal quarter.

The 1Q12 worldwide Router market increased 2.8% year over year. This was an improvement over the results from the previous quarter (4Q11) when the overall router market was down 3.9% on an annual basis. Regionally, the strong 14.7% growth in North America, 10.8% increase in Latin America, and 5.1% growth in Asia/Pacific were offset by a decline of 14.7% in EMEA in 1Q12.

From a vendor perspective, Cisco's Ethernet switch (Layer 2/3) market share in 1Q12 came in at 65.1% reflecting a significant year-over-year improvement from 63.0% in 1Q11. Cisco's market share in the fast growing 10GbE market segment stands at 69.4% in 1Q12.

"The Ethernet switch market continued to build on its momentum established in the second half of last year. The year-over-year growth in 1Q12 was the highest since the fourth quarter of 2010," said Petr Jirovský, senior research analyst in IDC's Networking Trackers Group. "The overall market drivers, such as proliferation of video traffic on the network, are mitigating to a large extent the increased macroeconomic uncertainty and weakness in the public sector in many regions."

The IDC's Worldwide Quarterly Enterprise Networks Tracker provides total market size and vendor shares for the Ethernet switch and router technologies in an easy-to-use Excel pivot table format. The geographic coverage for both the Ethernet switch market and the router market includes eight major regions (USA, Canada, Latin America, Asia/Pacific (excluding Japan), Japan, Western Europe, Central and Eastern Europe, and Middle East and Africa) and 52 countries. The Ethernet switch market is further segmented by speed (100Mb, 1000Mb, 10Gb), form factor (fixed managed, fixed unmanaged, modular), and layer (L2, L3, L4-7). Measurement for the Ethernet switch market is provided in factory revenue, customer revenue, and port shipments. The router market is further split by product class (high-end, mid-range, low-end, SOHO) and deployment (service provider, enterprise) and the measurements are in factory revenue, customer revenue, and unit shipments.

For more information about IDC's Worldwide Quarterly Enterprise Networks Tracker, please contact Kathy Nagamine (knagamine@idc.com).

About IDC

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For more information, please contact:
Rohit Mehra
rmehra@idc.com
508-935-4343

Petr Jirovsky
pjirovsky@idc.com
413-313-6112