IHS reports best growth for Ethernet switch market since worldwide recession. Cisco lost some of its massive share as Huawei gained.
For the worldwide Ethernet switch market, 2017 was a very good year. In fact, with revenue rising 8% to reach nearly $25 billion, it experienced the most growth in seven years, since the depths of the global recession, according to IHS Markit.
In a report released Monday, the research firm cited a couple trends driving the Ethernet switch surge: Companies upgrading and expanding their data centers, and growing demand for campus equipment as business confidence improves, particularly in North America.
The North American Ethernet switch market grew 5% last year, but Asia Pacific continues to be the top growth region, mostly driven by demand in China, IHS said.
In the fourth quarter of last year, worldwide Ethernet switch revenue grew 2% from the third quarter to $6.7 billion. Vendors had mixed results in the fourth quarter, however. The market leader, Cisco, actually saw its revenue dip 2% compared to the same quarter a year ago. Meanwhile, revenue for the No. 2 vendor, Huawei, shot up 24% and No. 3 supplier, HPE (Aruba), grew 13%, according to IHS.
Last year marked the first time Huawei has been the No. 2 Ethernet switch vendor for the entire year, researchers said.
The IHS report also showed strong sales of 100 Gigabit Ethernet ports, which increased four-fold in 2017 compared to 2016. At the same time, sales of 40GbE ports dropped for the first time on an annual basis, falling 9%.
Companies are transitioning to 25GbE/100GbE architectures in their data centers, which is bringing down the 40GbE market segment, Matthias Machowinski, IHS Markit's senior research director for enterprise networks and video, said in a statement.
“Power over Ethernet is also growing once again, a sign of strengthening campus switching demand," he said.
The IHS report tracks unmanaged, web-managed and fully managed fixed and chassis switches by port speed and revenue.