New Q3 data from Synergy Research Group shows that vendor revenues from Ethernet switch and router markets reached an all-time high. While the markets have only been growing by an average 1% annually, this was enough to nudge quarterly revenues to well over $11 billion, surpassing all previous quarters. Meanwhile Cisco’s share of the total worldwide switch and router market was 53%, the highest it has been since early 2016. Its market shares in the individual segments ranged from 63% for enterprise routers to 40% for service provider routers. 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, Arista Networks, and HPE. Their overall switch and router market shares were in the 4-11% range in Q3. There is then a reasonably long tail of other vendors, with H3C and Extreme being the most prominent challengers.
Worldwide switching and router revenues were well over $11 billion in Q3 and were $43 billion for last four quarters, representing 1% 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 almost 40% 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 has benefitted Huawei in particular.
“Despite challenges from SDN, NFV and hyperscalers’ own-design networking gear, the market for Ethernet switches and routers is huge and continues to grow, albeit slowly,” said John Dinsdale, a chief analyst at Synergy Research Group. “While Arista is the high-growth star and Huawei continues to consolidate its number two ranking in the market, the biggest story is Cisco’s ability to continue controlling over half of the market. It had a particularly strong quarter and no other vendor is seriously challenging its position.”