New data from Synergy Research Group shows that vendor revenues from Ethernet switch and router markets passed the $12 billion mark in the final quarter of 2018, achieving a new all-time high. For the full year vendor revenues were in excess of $44 billion, up 4% from 2017. Ethernet switches, enterprise routers and service provider routers all saw double digit growth in Q4 relative to 2017. For the full year the router markets were relatively flat compared to 2017 while spending on Ethernet switches grew 8%. Cisco’s market share in switches and routers was 51% in Q4, meaning that for ten of the last twelve quarters it has been over the 50% mark. Across the three main markets, Cisco’s Q4 share was 57% for Ethernet switches, 60% for enterprise routers and 37% for service provider routers. Behind Cisco the ranking of vendors was different in each of the three markets but in aggregate Cisco is followed by Huawei, Nokia, Juniper, Arista Networks and HPE. Beyond this leading group, other active vendors include Ericsson, Extreme, H3C and ZTE.
Ethernet switching is the largest of the three segments accounting for 59% of the total Q4 market and it is also the segment that has by far the highest growth rate. While demand for GbE switches continues to grow, the most notable feature of the market is the rapid deployment of 100 GbE and 25 GbE fixed switches. In Q4 revenues from both enterprise routers and service provider routers saw a strong uptick, helping to balance out declines seen in the first three quarters. Full-year revenues for enterprise routers were marginally up on 2017 while revenues from service provider routers were marginally down. In Q4 North America remained the biggest region accounting for almost 40% of worldwide revenues, followed by APAC, EMEA and Latin America. The APAC region has typically been the fastest growing but in Q4 both EMEA and North America regions had a slightly higher growth rate.
“When you look at the overall Ethernet switch and router market the most notable feature is actually its stability. Despite a variety of challenges this large market keeps expanding slowly year after year,” said John Dinsdale, a chief analyst at Synergy Research Group. “Moreover, we are not expecting this trend to change any time soon. One other notable feature is Cisco’s ability to keep its market share at or above the 50% mark. Huawei’s market share keeps on nudging upwards and Arista has posed a big threat in large, high-speed switches, but Cisco is not being shifted from its market leadership position.”