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IDC's Worldwide Quarterly Ethernet Switch and Router Tracker Shows Low Growth in Both Markets in the First Quarter

The worldwide Ethernet switch market (Layer 2/3) reached $5.2 billion in the first quarter of 2014 (1Q14), representing year-over-year growth of 0.4% and a significant seasonal decline of -12.3% quarter over quarter. Meanwhile, the worldwide router market fared somewhat better, growing 2.3% year over year. Sequentially, the router market also decreased -12.5%, according to the preliminary results published in the International Data Corporation (IDC) Worldwide Quarterly Ethernet Switch and Router Tracker.

From a geographic perspective, the Ethernet switch market saw its highest growth in Latin America (up 11.4% year over year), relatively good performance in Asia/Pacific (up 1.9% year over year), and annual declines in both Europe, Middle East & Africa (EMEA) (down -0.5% year over year) and in North America (down -1.2% year over year).

"The worldwide Ethernet switch market continues to see different trends across market segments with datacenter deployments seeing growth in spite of the ongoing market transition while the enterprise campus segment is essentially flat lining or seeing slight declines depending on the segment or geography involved," said Rohit Mehra, Vice President, Network Infrastructure at IDC. "10GbE and 40GbE switch ports for the datacenter and campus core remain the growth engine for this market, although we do expect the GbE market to hold its own with port shipments during the coming years."

10Gb Ethernet switch (Layer 2/3) revenue increased 8.1% year over year to $2.0 billion while 10Gb Ethernet switch port shipments grew a strong 25.7% year over year to 4.9 million ports in 1Q14. 40Gb Ethernet is starting to reach critical mass as a stand-alone segment and now accounts for more than $250 million per quarter in revenue. 10Gb and 40Gb Ethernet continues to be the primary driver of the overall Ethernet switch market.

The worldwide enterprise and service provider router market grew 2.2% year over year in 1Q14. However, performance of the key segments within the router market varied widely with the service provider segment growing 4.2% year over year, whereas the enterprise segment declined -2.9% year over year. The router market also saw a varied performance on a regional basis. Asia/Pacific, Latin America, and EMEA all showed solid growth with 13.8%, 11.1%, and 9.1% year-over-year increases respectively. North America, on the other hand, declined -9.4% year over year.

From a vendor perspective, Cisco's Ethernet switch (Layer 2/3) revenue decreased -4.3% year over year in 1Q14 and its market share was 60.4%, which was slightly down from 61.1% in 4Q13. Cisco's market share in the fast growing 10GbE market segments was 62.2% in 1Q14. Cisco's service provider and enterprise router revenue declined -1.8% year over year this quarter.

HP's Ethernet switch revenue increased 4.6% year over year in 1Q14, ahead of the overall market growth. HP's market share now stands at 9.2% in 1Q14, on par with 4Q13, but up from the 8.8% in 1Q13.

Juniper had a strong quarter, having outperformed in both Ethernet switching and routing in 1Q14. Its router revenue was up 5.4% year over year and its Ethernet switch revenues saw exceptional strength, increasing 53.4% year over year.

"With datacenters seeing ever-increasing application workloads, 10Gb and 40Gb Ethernet is the greatest driver of today's Ethernet switch market," said Petr Jirovský, Research Manager in IDC's Networking Trackers Group. "However, regional variations in the market persist and vendors are cautioned to take this into account while working on their near- to mid-term go-to-market strategies."

An interactive graphic showing the relative market shares of the top 5 vendors in the worldwide Layer 2/3 Ethernet switch market over the previous five quarters is available here. The chart is intended for public use in online news articles and social media. Instructions on how to embed this graphic can be found by viewing this press release on IDC.com.

The IDC's Worldwide Quarterly Ethernet Switch and Router Tracker provides total market size and vendor shares for the Ethernet switch and router technologies in an easy-to-use Excel pivot table format. The geographic coverage for both the Ethernet switch market and the router market includes eight major regions (USA, Canada, Latin America, Asia/Pacific (excluding Japan), Japan, Western Europe, Central and Eastern Europe, and Middle East and Africa) and 58 countries. The Ethernet switch market is further segmented by speed (100Mb, 1000Mb, 10Gb, 40Gb), product (fixed managed, fixed unmanaged, modular), and layer (L2, L3, L4-7). Measurement for the Ethernet switch market is provided in vendor revenue, customer value, and port shipments. The router market is further split by product (high-end, mid-range, low-end, SOHO), deployment (service provider, enterprise), connectivity (core, edge), and the measurements are in vendor revenue, customer value, and unit shipments.

For more information about IDC's Worldwide Quarterly Ethernet Switch and Router Tracker, please contact Kathy Nagamine ([email protected]).

About IDC Trackers

IDC Tracker products provide accurate and timely market size, vendor share, and forecasts for hundreds of technology markets from more than 100 countries around the globe. Using proprietary tools and research processes, IDC's Trackers are updated on a semiannual, quarterly, and monthly basis. Tracker results are delivered to clients in user-friendly excel deliverables and on-line query tools. The IDC Tracker Charts app allows users to view data charts from the most recent IDC Tracker products on their iPhone and iPad.

About IDC

International Data Corporation (IDC) is the premier global provider of market intelligence, advisory services, and events for the information technology, telecommunications, and consumer technology markets. IDC helps IT professionals, business executives, and the investment community to make fact-based decisions on technology purchases and business strategy. More than 1,000 IDC analysts provide global, regional, and local expertise on technology and industry opportunities and trends in over 110 countries. In 2014, IDC celebrates its 50th anniversary of providing strategic insights to help clients achieve their key business objectives. IDC is a subsidiary of IDG, the world's leading technology media, research, and events company. You can learn more about IDC by visiting www.idc.com.

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