01 Mar 2019
IDC's Worldwide Quarterly Ethernet Switch and Router Trackers Show Strong Growth in the Fourth Quarter and Full Year 2018
Worldwide Ethernet Switch Market Increased 12.7% Year Over Year in Fourth Quarter of 2018; Router Market Rebounds, Up 15.6%
FRAMINGHAM, Mass., March 1, 2019 – The worldwide Ethernet switch market (Layer 2/3) recorded $7.8 billion in revenue in the fourth quarter of 2018 (4Q18), an increase of 12.7% year over year. For the full year 2018, the market recorded $28.1 billion in revenue for a year-over-year growth rate of 9.1%. Meanwhile, the worldwide total enterprise and service provider router market recorded $4.6 billion in revenue in 4Q18, increasing 15.6% on a year-over-year basis. For the full year 2018, the router market finished at $15.5 billion, an increase of 1.8% over 2017. These results are according to the International Data Corporation (IDC) Worldwide Quarterly Ethernet Switch Tracker and Worldwide Quarterly Router Tracker.
Ethernet Switch Market Highlights
From a geographic perspective, the 4Q18 Ethernet switch market recorded strong growth in the Middle East & Africa region, which rose 15.7% year over year in 4Q18 and rose 10.6% in 2018 compared to 2017. Saudi Arabia rose 44.8% year over year in the quarter and was up 15.8% on the year. The Central & Eastern European region rose 14.9% year over year in 4Q18 and was up 12.6% on the full year. Russia's market grew 18.1% in 4Q18 and 18.6% for the full year. The Asia/Pacific (excluding Japan) (APeJ) region increased 10.5% year over year in 4Q18 and grew 15.5% for the full year 2018. The People's Republic of China, which makes up the largest share of the region's total, rose 7.8% in 4Q18 and was up 18.5% for the full year. Japan grew 3.3% year over year in the quarter and 2.2% for the full year.
In the Western Europe region, the Ethernet switching market grew 12.1% year over year in 4Q18 and 9.1% for 2018. The Netherlands grew 20.4% in 4Q18 and 9.6% for the full year. The Latin America region grew 4.4% in the quarter and rose 1.4% for the full year. Brazil helped power the region's growth with a 12.8% year-over-year gain in the quarter and a 10.2% full-year increase. Canada's market grew 9.6% in the quarter and 9.0% for the full year. In the United States, revenues rose 3.6% in 4Q18 compared to 3Q18, but jumped up 15.9% year over year, driving annual revenues 6.6% higher in 2018 vs. 2017.
"The Ethernet switching market saw solid growth around the world, driven by investments in both mature and emerging countries, indicating the strong demand for network infrastructure that powers enterprise Digital Transformation efforts," said Rohit Mehra, vice president, Network Infrastructure at IDC. "The market's strong fourth quarter helped push full year gains in Ethernet switching and sets the market up for continued strength in 2019, creating opportunities for vendors to capitalize on around the globe."
100Gb Ethernet switch revenue continues to grow rapidly as adoption by hyperscale cloud providers and large enterprises accelerates. 100GbE shipments reached more than 3.8 million ports and $1.1 billion in revenue in 4Q18. 100GbE shipments accounted for 13.6% of the full year's Ethernet switching revenue compared to 8.5% in 2017. 25Gb Ethernet switch products continue to see strong growth with port shipments rising 14.8% sequentially to 3.0 million and $293.5 million in revenue in 4Q18. The 10GbE market continues to see healthy growth but pricing pressure is holding back revenue increases. 10Gb port shipments in 4Q18 grew 14.6% year over year while revenues decreased 1.6%. 10GbE made up 30.6% of all 2018 Ethernet switching revenues. Meanwhile, 1Gb remains the primary connectivity technology for enterprise campus and branch deployments, driving 1Gb port shipments to 128.3 million in 4Q18, growing 12.7% year over year and making up 68.8% share of all ports shipped. 1GbE represented 41.8% of 2018 Ethernet switching revenues.
Router Market Highlights
The worldwide enterprise and service provider router market grew 24.2% sequentially and 15.6% year over year in 4Q18 with the larger service provider segment rising 20.3% and the enterprise portion growing 2.2%. For the full year, the combined market increased 1.8% with the service provider segment driving 2.0% growth and the enterprise segment growing 1.2%.
The combined enterprise and service provider router market saw growth around the world, with APeJ growing 22.4% year over year in 4Q18 and up 13.6% for the full year. Middle East & Africa increased 17.6% year over year and 9.2% annually. The U.S., which is the largest worldwide market, was up 12.4% year over year but down 11.1% for the full year. Western Europe rose 12.9% year over year in 4Q18 and was up 4.9% for the full year.
Cisco finished 4Q18 with a 13.2% year over year increase in Ethernet switching revenues and market share of 53.2%. For the full year 2018, Cisco switching revenues rose 5.2% over 2017 while recording 52.8% market share (compared to 54.8% in 2017). In the hotly-contested 10GbE segment, Cisco remains the market leader, earning 48.5% of 10Gb revenues in 4Q18. Cisco's combined service provider and enterprise router revenue increased 17.9% year over year in 4Q18, but was off 2.7% for the full year, giving the company 38.8% share in 2018.
Huawei's Ethernet switch revenue grew 6.0% year over year in 4Q18 for a market share of 9.7%. For the full year 2018, Huawei's Ethernet switch revenues grew 20.2%. Huawei's enterprise and service provider router revenue increased 35.1% year over year in 4Q18 and rose 22.5% for the full year, giving the company 28.7% market share in 2018.
Arista Networks' Ethernet switching revenue rose 23.6% year over year and 28.5% in 2018. 100GbE revenues for Arista rose 6.6% sequentially in 4Q18 and were up 69.4% on the full year. Arista's market share stood at 6.5% to end 2018, compared to 5.6% at the end of 2017.
Hewlett Packard Enterprise (HPE) revenues rose 20.2% year over year in 4Q18. That led to a 16.5% year over year increase in 2018, putting the company's full year market share at 6.1% compared to 5.7% for 2017.
Juniper's Ethernet switch revenues declined 2.0% year over year in 4Q18 and were off 3.1% for the full year. Juniper's router revenues declined 12.7% year over year. The company finished 2018 with 14.7% market share in the service provider routing market, down from 18.0% in 2017.
The Worldwide Quarterly Ethernet Switch Tracker and the Worldwide Quarterly Router Tracker provide 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 60 countries. The Ethernet switch market is further segmented by speed (100Mb, 1000Mb, 10Gb, 25Gb, 40Gb, 50Gb, 100Gb), product (fixed managed, fixed unmanaged, modular), and layer (L2, L3, ADC). Measurement for the Ethernet switch market is provided in vendor revenue, 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, value, and unit shipments.
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 online query tools.
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. With more than 1,100 analysts worldwide, IDC offers global, regional, and local expertise on technology and industry opportunities and trends in over 110 countries. IDC's analysis and insight helps IT professionals, business executives, and the investment community to make fact-based technology decisions and to achieve their key business objectives. Founded in 1964, IDC is a wholly-owned subsidiary of International Data Group (IDG), the world's leading media, data and marketing services company that activates and engages the most influential technology buyers. To learn more about IDC, please visit www.idc.com. Follow IDC on Twitter at @IDC and LinkedIn.