In the fast-paced world of networking technology, the latest market share statistics for Ethernet switch and router vendors have been revealed by the International Data Corporation (IDC) for the second quarter of 2023. The report sheds light on the performance and market positions of industry giants and emerging players in this ever-evolving landscape.
Ethernet Switch Vendors: Cisco Dominates
Cisco, a juggernaut in the networking industry, showed remarkable growth in Ethernet switch revenues, marking an impressive 55.3 percent increase year over year in the second quarter of 2023. This surge has solidified Cisco’s market share, now standing at a commanding 47.2 percent.
Arista Networks, another prominent player, also demonstrated substantial growth in the same period, with Ethernet switch revenues soaring by 42.6 percent year over year. Arista Networks now claims a market share of 10.4 percent, positioning itself as a formidable competitor in the market.
Huawei, despite facing various challenges, saw a respectable 17.7 percent increase in Ethernet switch revenue during Q2 2023, securing a market share of 9.0 percent. Meanwhile, HPE’s Ethernet switch revenue surged dramatically by 78.8 percent, resulting in a 7.1 percent market share, showcasing the company’s resilience and competitiveness.
H3C faced a slight decline, with Ethernet switch revenue dropping by 10.9 percent year over year in the second quarter. This resulted in a market share of 4.1 percent. Juniper, on the other hand, experienced a 35.2 percent year-over-year growth in Ethernet switch revenue, achieving a market share of 2.9 percent.
Service Provider and Enterprise Router Vendors: Cisco Lead
Cisco continues to assert its dominance, not only in Ethernet switches but also in the service provider and enterprise router segment. Cisco’s combined service provider and enterprise router revenue witnessed an 18.1 percent growth in the second quarter of 2023, granting Cisco a substantial market share of 35.9 percent.
Huawei, a global telecommunications giant, also showed resilience and growth in this segment, with combined service provider and enterprise router revenue rising by 10.8 percent. This led to a noteworthy market share of 33.3 percent for Huawei in the second quarter.
H3C, however, faced a challenging period, with revenues declining by 10.0 percent in the combined service provider and enterprise routing market. As a result, H3C’s market share dipped to 2.0 percent.
Juniper, a well-known name in the industry, experienced a modest 2.5 percent year-over-year growth in routing revenue during Q2 2023, securing a market share of 10.3 percent this quarter.
Ethernet Switch Market Achieves Phenomenal Growth in 2Q23
The global Ethernet switch market has demonstrated an extraordinary surge in revenues, with a remarkable 38.4 percent year-over-year growth, reaching a substantial $11.8 billion in the second quarter of 2023 (2Q23). This remarkable progress was revealed in the latest reports from the IDC Worldwide Quarterly Ethernet Switch Tracker and Worldwide Quarterly Router Tracker.
Ethernet Switch Market Highlights
The robust growth of the Ethernet switch market in 2Q23 builds on an already impressive annualized growth rate of 31.6 percent in the preceding quarter, 1Q23. Over the first half of 2023, the Ethernet switch market has experienced an astonishing 35.2 percent increase when compared to the same period in 2022. A significant driving force behind this expansion is the amelioration of supply chain challenges initially triggered by the global pandemic.
With improved availability of crucial components, vendors are increasingly capable of recognizing revenues from fulfilling backlogged product orders. This trend is particularly salient in the non-datacenter segment of the Ethernet switching market, where revenues soared by 52.5 percent year over year in 2Q23, accompanied by a 16.6 percent increase in port shipments. In contrast, the datacenter segment saw revenues rise by 21.7 percent year over year in 2Q23, albeit with a 2.4 percent decline in port shipments.
Furthermore, higher-speed segments of the Ethernet switch market continue to flourish, primarily in the datacenter sector. This growth is being propelled by hyperscale companies and cloud providers as they expand their datacenter network capacities. Notably, revenues for 200/400 GbE switches surged by 61.9 percent year over year, and 100GbE revenues experienced an 18.5 percent boost in 2Q23.
The 25/50 GbE segment also achieved impressive growth, with revenues increasing by 54.2 percent year over year. Original device manufacturer (ODM) Direct sales remain a vital component of the datacenter segment, surging by 12.2 percent compared to 2Q22, and now constituting 12.6 percent of the datacenter segment’s revenues.
Lower-speed switches, often deployed in enterprise campus and branch locations, exhibited resilience, partly attributed to the ongoing alleviation of supply chain constraints. In this regard, revenues for 1GbE switches saw a substantial year-over-year increase of 53.1 percent in 2Q23, while 10GbE switches witnessed an 18.1 percent rise in the same period. The 2.5/5GbE switch revenue, also known as multi-gigabit Ethernet switches, experienced a phenomenal year-over-year growth of 157.5 percent in 2Q23.
From a geographical perspective, the Ethernet switch market displayed growth across most regions worldwide. In the Americas, quarterly market revenues surged by an impressive 54.3 percent on an annualized basis, with growth rates of 51.8 percent in the United States and a remarkable 88.3 percent in Latin America. In Europe, the market exhibited a 49.1 percent year-over-year increase, marked by a 60.8 percent growth rate in Central and Eastern Europe and a 44.0 percent rise in Western Europe. The Middle East and Africa region witnessed a staggering 62.4 percent year-over-year revenue growth. In the Asia/Pacific region, markets grew by 7.7 percent, with the People’s Republic of China market experiencing a slight dip of 7.8 percent year over year while Japan’s market surged by 18.9 percent.
Vijay Bhagavath, Research Vice President of Cloud and Datacenter Networks at IDC, commented on this remarkable growth, attributing it to enterprises, hyperscalers, and service providers worldwide efficiently investing in higher-speed and feature-rich platforms to accommodate new applications such as Generative AI workloads. Bhagavath also noted that the ongoing easing of component shortages has allowed vendors to recognize revenues from backlogged orders, ensuring that the Ethernet switching market will remain dynamic as supply chains continue to normalize and high-performance network capacity continues to expand.
Router Market Highlights
In the router market, the service provider segment, encompassing communications and cloud service providers, accounted for a significant 77.5 percent of the market’s total revenues in 2Q23. This segment witnessed a healthy 14.8 percent year-over-year revenue increase, whereas the enterprise segment experienced a decline of 6.1 percent in the same period. From a regional standpoint, the combined service provider and enterprise router market in the Americas grew by 10.3 percent, and in the Asia/Pacific region, the market expanded by 3.0 percent year over year. In the Europe, Middle East & Africa (EMEA) region, the market demonstrated substantial growth, with an 18.3 percent year-over-year increase in 2Q23.
