Switch Market Jumped 24% in 2004: Report

The Level 2-7 local area network (LAN) switch market grew substantially in 2004, according to numbers released today by Infonetics Research. Worldwide revenues from switch sales were up 24% last year over 2003, although Infonetics noted a 2% revenue drop in the last quarter.

L2-L3 switches represent the bulk of this marker, and although Infonetics notes a 3% drop in their sales, to $3.6 billion in the last quarter of 2004, the firm expects revenues to rise 7% through to the end of this year, representing a 2% increase in ports. North Americans are the biggest consumers of L2-L3 switches, accounting for 46% of worldwide revenues, with Europe, the Middle East and Africa representing 33%. Not surprisingly, Cisco is the L2-L3 fixed configuration market leader, with a 56% market share of revenues and 29% of ports, with 3Com second in revenues.

According to Infonetics, the demand for Chassis-based devices drive the L4-L7 switch and load balancer market to $165 million in revenues in the last quarter of 2004, a 9% increase over the previous quarter. Sales of L4-L7 switches with SSL continued to grow strongly, increasing by 22% to $70 million in revenues by the fourth quarter of last year. Infonetics expects the trend to continue, forecasting 11% growth by the end of this year.

The market for L4-L7 switches is clearly dominated by F5 Networks, which claimed 54% of revenues and 56% of ports shipped in the last quarter. However, Cisco is almost as dominant in global sales of L4"L7 switch and load balancers without SSL, with a share of 44% revenues and 43% ports.

"It's been a good year in the LAN switch market," Infonetics Research directing analyst Matthias Machowinski said in a statement. "Sales of Gigabit switches drove the market significantly higher, and, on a yearly revenue basis, are finally outpacing those of 10/100M switches. Cisco continues to have a stronghold on the overall market, especially in the chassis segment. But Cisco has been steadily losing fixed configuration port market share over the last year, against competitors like NETGEAR and D-Link."