Cisco maintains comfortable lead in Q3 2017 switching and router race with 50% share

router (Pixabay)
Currently, Cisco’s shares range from 63% for enterprise routers to 38% for service provider routers.

Cisco continues to hold onto its dominant position in routing and switching, achieving 51% share of the total market as of third-quarter 2017, with a new Synergy Research report showing strong leads in enterprise and service provider segments.

Currently, Cisco’s shares range from 63% for enterprise routers to 38% for service provider routers. Synergy noted that this was the best market share performance since the first quarter of 2016.

However, Cisco’s aggregate market share did slip to 50%, two percentage points from the earlier four quarters.  

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“The big picture is that total switching and router revenues are still growing and Cisco continues to control half of the market,” said John Dinsdale, a chief analyst at Synergy Research Group, in a release. “Some view SDN and NFV as existential threats to Cisco’s core business, with own-design networking gear from the hyperscale cloud providers posing another big challenge.”

Dinsdale added that even with service providers mandating vendors to shift towards software-based solutions, which Cisco is also doing, the movement is not causing major disruption for the vendor yet.

“While these are genuine issues which erode growth opportunities for networking hardware vendors, there are few signs that these are substantially impacting Cisco’s competitive market position in the short term,” Dinsdale said.

Synergy Q3 2017

While the ranking of vendors was different in each of the three main segments, Synergy said in aggregate Cisco is trailed by Huawei, Juniper, Nokia and HPE. These vendors’ overall switching and router market shares were in the 4-10% range in the third quarter.

Following these four vendors, the research firm said there’s “a reasonably long tail of other vendors, with Arista and H3C being the most prominent challengers.”

Overall, worldwide switching and router revenues surpassed $11 billion in the third quarter and were at $44 billion over the last four quarters, representing 3% growth on a rolling annualized basis. Driven by aggressive growth in the deployment of 100 GbE and 25 GbE switches, Ethernet switching is the largest of the three segments, making up almost 60% of the total. It is also the segment that has by far the highest growth rate.

In the third quarter, North America remained the biggest region accounting for over 41% of worldwide revenues, followed by APAC, EMEA and Latin America. The APAC region has been the fastest growing and this was again the case in third quarter, with growth being driven in large part by spending in China. Growth in China benefitted Huawei.