Cisco sees revival in Ethernet switches

BOSTON, USA: Ethernet switch sales jumped 13 per cent sequentially, to $5.0 billion globally in 3Q11, following a relatively weak performance in the first half of 2011 (1H11), finds market research firm Infonetics Research.

In its third quarter 2011 (3Q11) Ethernet Switches and Enterprise Routers market share reports, it finds that Ports have been growing all along as demand for networking products continues, however, fierce competition cut into revenue growth in 1H11.

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"Rejuvenated competition in the Ethernet switching market has taken its toll on Cisco over the past year, but in 3Q11, Cisco turned things around with a blowout quarter, showing that their internal reorganization and more aggressive stance are starting to pay off, says Matthias Machowinski, directing analyst for enterprise networks and video at Infonetics Research.

10G ports had the highest growth, up 21% quarter over quarter, and almost double the year-ago level, benefitting from data center upgrades, 10G server adoption, server virtualization, and core network buildouts

"Cisco grew their overall Ethernet switch revenue 18 per cent, and captured 68 per cent of the global market. More importantly, Cisco gained almost three points of market share, mostly at the expense of their closest rival, HP, who is facing their own myriad of well-publicized challenges. It's impossible to tell where things go from here, but at least for now, Cisco has changed the momentum," notes Machowinski.

The long-awaited 40G market finally emerged in 3Q11, with $6.5 million in global revenue.

Ethernet switch average selling prices (ASPs) have declined over 20 per cent the past year, however, now vendors are holding the line on discounting.

Number-three player Juniper had a solid quarter, sequentially up six per cent in revenue and 12 per cent in ports, and still logging double-digit year-over-year growth.