Revenue from Ethernet switches rose 8% in 2017, nearly reaching $25 billion for the year. The largest yearly growth in switch revenue in seven years was attributed to increasing demand from both the data center and enterprise segments.
“Growth in the Ethernet switch market is being fueled by data center upgrades and expansion, as well as growing demand for campus gear due to improving business confidence,” said Matthias Machowinski, senior research director for enterprise networks and video at IHS Markit.
"If you look at the large data center operators, many are expanding their data center footprint in response to surging interest in cloud services. In addition, they need to upgrade their older facilities every 2-3 years," Machowinski told FierceTelecom.
“The transition to 25/100GE architectures in the data center is in full swing, driving strong gains in 25GE and 100GE, while in turn bringing down the 40GE segment, which had its first annual decline,” Machowinski said in a statement. “Power over Ethernet is also growing once again, a sign of strengthening campus switching demand.”
The 25/100GE segment is actually the 25/50/100GE segment. Asked about the 50GE increment, Machowinski told FierceTelecom "we expect that market to take off when single lane 50G technology becomes available (later this year)."
On a regional basis, growth in the North American Ethernet switch market came back in 2017 (up 5%), as did EMEA to a lesser extent. The analysis firm said Asia Pacific (APAC) remains the top growth region, primarily due to China.
That has had some effect on who sales were going to. Cisco remains the market leader, but its revenue declined 2% year over year. Chinese vendor Huawei solidified its position as the No. 2 supplier, with revenue growth of 24%. In third place was HPE (Aruba), which grew 13%.
Huawei is growing despite being frozen out of North America.
Top 3 vendors by region (CY17 revenue, in order) , according to IHS Markit were:
North America: Cisco, Arista, Juniper
EMEA: Cisco, HPE (Aruba), Huawei
APAC: Cisco, Huawei, H3C