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

FRAMINGHAM, Mass., August 23, 2012 – Worldwide Ethernet switch (Layer 2/3) revenues reached $5.5 billion in the second quarter of 2012 (2Q12), representing strong growth of 8.5% year over year. Meanwhile, worldwide router revenues increased a modest 0.6% year over year in 2Q12, according to the International Data Corporation (IDC) Worldwide Quarterly Enterprise Networks Tracker. The preliminary 2Q12 results also show strong Ethernet switch market growth in Latin America, which increased 17.0% year over year, and in Asia/Pacific, up 15.4%. North America increased 5.9% year over year in 2Q12 and Europe, Middle East, and Africa (EMEA) region grew 5.2% year over year, a surprisingly strong performance given the difficult macroeconomic conditions in Europe.

"Building on the momentum from the previous quarter, the positive 2Q12 performance in the Ethernet switch market shows that the network continues to play a pivotal role in IT infrastructure rollouts," said Rohit Mehra, director, Enterprise Communications Infrastructure at IDC. "10GbE along with the emerging 40GbE Ethernet switch segments are leading the market to higher levels, clearly proving the point that growth in applications, virtualization, and mobility has to be looked at in conjunction with the underlying wired infrastructure in datacenters and campus deployments."

Highlights from the 2Q12 Enterprise Networks Tracker include the following:

10GbE switch (Layer 2/3) revenue increased 22.9% year over year and 10GbE port shipments grew to a record 3.0 million ports in the quarter and continue to drive the overall market growth.

The Layer 4-7 switching market in 2Q12 grew 11.2% year over year to reach $376.1 million, although this was down 5.6% over the previous quarter.

The 2Q12 worldwide Router market increased 0.6% year over year. Regionally, the strong 16.8% growth in Latin America, and the 10.5% increase in Asia/Pacific were offset by a 0.4% decline in North America and a 10.6% decrease in EMEA in 2Q12, on a year over year basis.

From a vendor perspective, Cisco's Ethernet switch (Layer 2/3) market share in 2Q12 came in at 62.1% reflecting a small year-over-year decrease from 62.6% in 2Q11. Cisco's market share in the fast growing 10GbE market segment stands at 66.8% in 2Q12.

"Even the Gigabit Ethernet segment showed strength in 2Q12 with over 55 million ports shipped in the quarter, and market revenues growing 6.5% from the previous quarter," 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).

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