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Worldwide revenues in Ethernet switches grew 24.5% to $12 billion during 2004 as organisations launched themselves into major network upgrades.
Worldwide revenues in Ethernet switches grew 24.5% to $12 billion during 2004 as organisations launched themselves into major network upgrades.
According to research at market analyst Gartner, many companies that had not upgraded their networking infrastructure since the late 1990s due to budget constraints, addressed the issue in 2004. Analyst Rachna Ahlawat says the market had a significant growth spurt over the past year because these businesses are now replacing infrastructure that is at the end of its life or is no longer supported by vendors. But another key factor was increased demand for so-called 'Power over Ethernet' (PoE) ports.
Cisco Systems continues to dominate the global market for Ethernet switches. The computer systems giant gained an additional 4% of market share in 2004, making its three-quarters share of the total market by revenue worth over $9 billion. In second place, Nortel recorded revenues of $3.9 billion but, over the year, Hewlett-Packard (HP) experienced the greatest gain, with a 39.4% jump in growth, making its share worth $3.6 billion. Of the major players, only 3Com posted negative growth over the period with $3.6 billion in revenues, though it was still ahead of Foundry Networks' $2.6 billion.
More than 189 million Ethernet port units were shipped worldwide during 2004, up 22% from the 155 million sold in 2003. According to the report, demand for PoE ports has more than tripled over the past year, and 18% of all 'wiring closet' switch ports shipped in 2004 were PoE-enabled.
Cisco also led the pack unit shipments league, having pushed 76.8 million units out the door during 2004 - 40% of the total units shipped worldwide. Trailing Cisco, in unit terms, were 3Com and D-Link, although both lost market share over the year. Meanwhile, Netgear, currently ranked fourth, showed the biggest surge in year-over-year growth, outpacing the market average by almost double.
Revenue at the high-end, the largest router segment, increased 9.1% to $366.2 million. Although Cisco was the overall leader in EMEA during this period, its market share (by revenue) plummeted 3.4% between the second to third quarter, having sunk 9% in the preceding quarter. Its market share now stands at 58.5%.
Reflecting that, Cisco's quarterly sales in the area decreased by 1.7% to $538.6 million. According to Hulleman, Cisco's results can be explained by strong competition with Juniper Networks in the high-end segment and a decrease in its sales of small-office/home-office and low-end routers.
Other major vendors challenging Cisco over the period were Zyxel, Netgear and D-Link.
