IHS Markit (Nasdaq: INFO), a world leader in critical information, analytics and solutions, released findings from its Ethernet Switches market tracker, which showed that worldwide Ethernet switch revenue grew 10% YoY in 2Q17, reaching $6.2B. Demand has consistently improved over the past five quarters, and growth finally reached a double-digit rate in 2Q17 on strong data center demand, as cloud service providers (CSPs) upgrade and expand their DC infrastructure. Campus demand, which was weak throughout 2016, has steadied and is no longer the drag on growth it was a year ago.
“The transition to 25/100GbE architectures in the data center is in full swing, and for the first time, vendors shipped over one million 100GbE ports in a quarter,” said Matthias Machowinski, Senior Research Director at IHS Markit. “The victim of this success is 40GbE, which has been declining for the past year. And already, the industry is looking ahead to the next generation of speeds, 200 and 400GbE, driven by unabated traffic growth in web-scale data centers.”
IHS Markit expects material 200/400GbE shipments by 2019 and revenue near $1B by 2021. 400GbE will be the long-term winner, but there will be an interim market for 200G solutions in web-scale data centers until 400G solutions are available and a leading transceiver form factor has emerged.
More Ethernet Switch Market Highlights
- Total port shipments grew 12% YoY in 2Q17, reaching a total of 160M ports shipped.
- 40GbE port shipments were down 14% on a YoY basis in 2Q17. In return, 100GbE port shipments have been growing ferociously, up 7x YoY and exceeding 1M ports during the quarter for the first time.
- North America and EMEA improved in 2Q17, and Asia Pacific remains the top growth region.
- Vendor performance varied quite a bit in 2Q17: #1 Cisco grew 3% YoY, #2 Huawei grew 56%, #3 HPE (Aruba) was flat, #4 Arista was up 50% YoY, and #5 Juniper grew 33%. White box revenue was up 32% YoY.
The IHS Markit quarterly Ethernet Switches Market Tracker provides worldwide and regional market size, vendor market share, forecasts through 2021, analysis and trends for unmanaged, web-managed and fully managed fixed and chassis switches by port speed (1/2.5/10/25/40/50/100/200/400GbE). Vendors tracked include Adtran, Alaxala, Apresia, Alcatel-Lucent Enterprise, Arista, Brocade, Cisco, D-Link, Dell, Extreme, Hewlett-Packard Enterprise, Huawei, Juniper, Lenovo, Netgear, Ruby Tech, TP Link, Ubiquiti, ZTE, and others.