IDC: Global Ethernet switch market achieved strong organic growth in the third quarter

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According to IDC's Global Ethernet Switch and Router Quarterly Tracking Report, the global Ethernet switch market revenue was US$8.1 billion in the third quarter of 2021, a year-on-year increase of 7.5%. At the same time, the global enterprise and service provider (SP) router market revenue increased by 4.7% year-on-year to US$3.8 billion.

Ethernet Switch Market Highlights

The Ethernet switch market grew 7.5% annually in the third quarter of 2021, building on growth achieved in the first half of the year. The first three quarters of 2021 grew 8.6% compared to the first three quarters of 2020. On a quarter-on-quarter basis, the quarter grew 9.3% over the previous quarter. Compared to the third quarter of 2019, before the outbreak, revenue grew 9.6%, indicating strong organic growth in the market.

From a regional perspective, the Ethernet switch market achieved strong results in most parts of the world in the third quarter of 2021. In the Asia-Pacific region, the Chinese market grew 18.1% year-on-year, while the Japanese market declined 13.6%. The rest of Asia-Pacific (excluding China and Japan) (APeJC) grew 7.3% year-on-year, with South Korea growing 22.3%. The performance of the European market was mixed: Western Europe grew 16.7% year-on-year, with Germany growing 18.3%. The Central and Eastern European market grew 3.3%. The Middle East and Africa market declined 8.9% year-on-year. In the Americas, the United States grew 5.5%; Canada declined 0.2%, the Latin American market grew 16.0% year-on-year, and Brazil grew 43.6% year-on-year.

Brad Casemore, research vice president of Data Center and Multi-Cloud Networks at IDC, noted: "The Ethernet switching market continues to demonstrate impressive resilience, with healthy growth in the first three quarters of 2021 compared to the same period in 2020, driven primarily by demand from the enterprise campus network and branch office markets, hyperscale data centers, and other cloud providers as they continue to invest in data center switch capacity. However, there are also some headwinds in the market: supply chain issues caused by the pandemic mean that customers and vendors must plan accordingly for 2022, and the pandemic itself is still creating uncertainty for technology buyers, especially enterprise customers in certain specific industries."

The non-data center and data center segments of the Ethernet switch market achieved an overall growth of 9.1% in port shipments. In the third quarter of 2021, non-data center Ethernet switch revenue increased by 6.5% year-on-year, and port shipments increased by 9.1%. Non-data center Ethernet switches accounted for 87.1% of the total port shipments and 56.7% of the total market revenue. Data center Ethernet switch revenue and port shipments were balanced, with revenue increasing by 8.8% year-on-year and port shipments increasing by 8.7%.

The high-speed Ethernet switch market continues to see significant growth driven by hyperscale data centers and cloud providers. From the second quarter to the third quarter of 2021, 200/400GbE switch market revenue increased by 70.4%, and port shipments more than doubled to 118.1% from the previous quarter. 100GbE revenue increased by 13.8% year-on-year, and port shipments increased by 13.1% year-on-year. 100GbE revenue accounted for 24.5% of the total Ethernet switch market revenue. 25/50 GbE revenue declined by 1.1% annually, while port shipments declined by 7.8%.

Lower-speed switches, a more mature part of the market, had mixed results. 10GbE port shipments fell 1.5% year over year, and revenue fell 6.0% year over year; 10GbE switches accounted for 23.0% of the market's total revenue. 1GbE switch port shipments increased 10.5% year over year, and revenue increased 7.6%. 1GbE accounted for 34.4% of the total Ethernet switch market revenue. From the second quarter of 2021 to the third quarter of 2021, 2.5/5GbE switch revenue increased 7.3% month over month, and port shipments increased 6.7% month over month.

Router Market Highlights

The global enterprise and service provider router market grew 4.7% year-over-year in the third quarter of 2021, with the main service provider segment accounting for 76.4% of revenue, up 3.6%, and the enterprise segment growing 8.3%. Regionally, APeJC's overall market for service provider and enterprise routers grew 15.4%. The Japanese market declined 6.1%, while the Chinese market grew 2.2% year-over-year. Revenue in Western Europe fell 1.6% year-over-year, while combined enterprise and service provider revenue in Central and Eastern Europe fell 4.9% year-over-year. The Middle East and Africa region fell 1.7%. In the United States, the enterprise segment grew 27.6%, service provider revenue grew 5.4%, and the overall market grew 10.6% year-over-year. The Latin American market grew 7.3% year-over-year, and the Canadian market grew 6.2% year-over-year.

Manufacturer Highlights

In the third quarter of 2021, Cisco's Ethernet switch revenue share decreased by 1.3%, with a market share of 45.4%. In the quarter, the combined revenue of service provider and enterprise routers increased by 10.7% year-on-year, with a market share of 37.5%, of which enterprise router revenue increased by 14.1% and service provider revenue increased by 8.7%.

Huawei's Ethernet switch revenue increased 11.4% year-on-year in the quarter, with a market share of 10.7%, while its combined service provider and enterprise router revenue increased 4.0% year-on-year, with a market share of 28.1%.

Arista Networks Ethernet switch revenue increased 23.0% year over year, with a market share of 7.3%.

H3C's Ethernet switch revenue increased by 18.6% year-on-year, with a market share of 6.2%. The combined revenue of the service provider and enterprise routing market increased by 31.3%, with a market share of 2.2%.

HPE's Ethernet switch revenue grew 23.6% year over year, bringing its market share to 5.8%.

Juniper's Ethernet switch revenue (including its cloud-managed enterprise campus Mist portfolio, as well as its EX and QFX switch portfolio) grew 25.6% year over year, bringing its market share to 3.2%, while enterprise and service provider router revenue declined 11.0%, bringing its market share to 10.0%.

"The broadly strong performance of the global Ethernet switch market suggests that much of the world will continue to recover from the pandemic, which has reduced spending on network infrastructure," said Petr Jirovsky, research director for IDC's Network Trackers. "The growth in the third quarter of 2021 compared to the same period in 2019 suggests that market fundamentals are strong and is a positive sign for the future."