Cisco’s Share In Ethernet Switch Market Jumps

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After a difficult restructuring, Cisco’s share of the Ethernet switching space grew by almost three percent: IDC

Cisco Systems, which earlier this year said it was refocusing on its core businesses, saw its share of the competitive Ethernet switch market jump almost three percentage points in the third quarter, according to figures from market research firm IDC.

In their review of the networking space in the third quarter, the IDC analysts said that Cisco’s share of the Ethernet switch market rose to 66.5 percent, an increase over the 63.8 percent share it held during the same period last year. At the same time, Cisco continued to hold the lion’s share of the 10 Gigabit Ethernet space, with more than 73 percent of the market.

Flip of emphasis

The figures come during a year in which the networking giant underwent a harsh restructuring including the shuttering of some of its businesses – including the profitable Flip camera unit – realigning other businesses and shedding more than 8,000 jobs.

The restructuring came after several quarters of disappointing financial figures and criticism from some analysts that the company had lost its focus on its core businesses – including switching and routers – as it rapidly expanded into new areas, such as consumer technology.

In announcing strong quarterly earnings in November, Cisco CEO John Chambers (pictured) said the bulk of the reorganisation had been completed, and that the company was now working to grow its presence in areas that executives have identified as growth markets, including the data centre, cloud computing, collaboration, video, and switches and routers.

The overall worldwide Ethernet switch market in the third quarter hit record revenues of $5.9 billion, a jump of 6.1 percent over the same period in 2010 and a 10.9 percent rise over the second quarter.

“After a weaker-than-expected first half of 2011, the Ethernet switch market rebounded strongly this quarter largely on the basis of healthy demand in the Asia-Pacific region,” Rohit Mehra, director of IDC’s Enterprise Communications Infrastructure unit, said in a statement. “China experienced remarkable 44.1 percent year-over-year growth this quarter, but other countries in the region also showed exceptional growth.”

Pacific Rim booming

Growth in Australia, Korea and India in the third quarter were between 27 and 30 percent, “further reaffirming the continued relevance of network infrastructure within enterprise IT”, Mehra said.

Overall, Ethernet switch revenues in the Asia-Pacific region grew 27.8 percent in the third quarter, and the region now accounts for 25.8 percent of all revenues.

Meanwhile, worldwide revenues in the 10GbE switch space jumped 29.9 percent over the third quarter last year, and port shipments rose 99 percent as business ramped up the adoption of the technology in their data centres and campuses. Shipments of 10GbE ports grew to a record 2.09 million in the third quarter, according to IDC.

The global router market saw revenue growth slow in the third quarter, increasing 2.8 percent after several quarters of growth in the high single digits and low double digits, IDC analysts said. Growth in Asia-Pacific again was strong, at 9.4 percent, but it was less than 0.5 percent in both the Americas region and the Europe, Middle East and Africa area, in part due to difficult economic situations.

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