New Q3 data from Synergy Research Group shows that Cisco’s share of the total worldwide switching and router market was 51%, with shares in the individual segments ranging from 63% for enterprise routers to 38% for service provider routers. This was its best market share performance since the first quarter of 2016. For the last four quarters in aggregate Cisco’s market share was 50%, two percentage points down from the preceding four quarters. Behind Cisco the ranking of vendors was different in each of the three main segments but in aggregate Cisco is followed by Huawei, Juniper, Nokia and HPE. Their overall switching and router market shares were in the 4% to 10% range in Q3. There is then a reasonably long tail of other vendors, with Arista and H3C being the most prominent challengers.
Worldwide switching and router revenues were well over $11 billion in Q3 and were $44 billion for last four quarters, representing 3% growth on a rolling annualized basis. Ethernet switching is the largest of the three segments accounting for almost 60% of the total and it is also the segment that has by far the highest growth rate, propelled by aggressive growth in the deployment of 100 GbE and 25 GbE switches. In Q3 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 Q3, with growth being driven in large part by spending in China, which benefitted Huawei in particular.
“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. “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. 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.”