Hardware

Global ethernet switch, router markets deliver mixed results in 2Q20

In the latest data of “International Data Corp. (IDC) Quarterly Ethernet Switch Tracker and IDC Quarterly Router Tracker,” the ethernet switch market experienced a decrease of 6.3% year over year (YoY) or $6.6 billion revenue in the second quarter of 2020 (2Q20).

On the other hand, the worldwide total enterprise and service provider (SP) router market revenues recorded a slight YoY gain, with a 0.1% increase in 2Q20 to nearly $4 billion.

IDC said the global response to the COVID-19 pandemic impacted results across both the ethernet switch and router markets in the second quarter of 2020. Lockdowns imposed in numerous parts of the world caused many enterprises to pause investment plans. On the other hand, hyperscalers, cloud providers, and communication service providers increased investments in response to growing demand.

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Ethernet switch

From a geographic perspective, the Ethernet switch market saw YoY reductions in most global regions. A bright spot was China, which recorded a 25.4% YoY increase in 2Q20. The broader Asia-Pacific region (excluding Japan and China) fell by 6.7% YoY with Hong Kong’s ethernet switch market dropping 35.8%. Japan’s market was off 3% from a year earlier.

Western Europe’s ethernet switch market fell 13.1%, with the United Kingdom off 23.4% from a year earlier and France losing 20.5%. Central and Eastern Europe were down 7.6% with Hungary losing 20.1% YoY while the Czech Republic grew 17.6%. The Middle East and Africa region fell 7.5% with Qatar declining 17.1% but Israel gaining 7.6%. In the Americas, the United States was down 12.5% while Canada lost 16.5%. The Latin America region fell 22.1% with Mexico losing 21.6% compared to a year earlier.

Router market

The worldwide enterprise and service provider router market increased 0.1% on a YoY basis in 2Q20, with the major service provider segment, which accounts for 76.9% of revenues, growing 1.5% and the enterprise segment of the market declining 4.2%. From a regional perspective, the combined service provider and enterprise router market grew 18.1% YoY in China and was up 20.2% in Japan. The broader Asia/Pacific region (excluding Japan and China) fell 5.6% YoY. Revenues in Western Europe were off 10.4%, while the Central and Eastern Europe combined enterprise and service provider market declined 8.7%. The Middle East & Africa region was down 5.7% YoY. In the United States, the enterprise segment was down 12.0%, while service provider revenues fell 5.9%, giving the combined markets a 7.5% YoY drop. The Latin American market declined 2.6% on an annualized basis.

Vendor Highlights

Cisco finished 2Q20 with a 13.4% YoY decline in overall ethernet switch revenues and a market share of 47.2%. In the hotly contested 25Gb/100Gb segment, Cisco is the market leader with 35.7% of the market’s revenue. Cisco’s combined service provider and enterprise router revenue were down 9.6%, with enterprise router revenue decreasing 11.8% and SP revenues down 8.1% YoY. Cisco’s combined SP and enterprise router market share stands at 33.2%.

Huawei’s ethernet switch revenue rose 15.7% on an annualized basis, giving the company a market share of 12.0%. The company’s combined SP and enterprise router revenue increased 16.7% YoY, giving the company a market share of 36.3%.

Arista Networks saw ethernet switch revenues decline 17.9% in 2Q20, bringing its share to 6.4% of the total market. 100Gb revenues account for 72.4% of the company’s total revenue, reflecting the company’s longstanding presence at cloud providers and large enterprises.

HPE’s ethernet switch revenue declined 17.3% YoY, giving the company a market share of 5.1%.

Juniper’s ethernet switch revenue fell 8.2% in 2Q20, bringing its market share to 2.8%. Juniper saw a 3.3% decline in combined enterprise and SP router sales, bringing its market share in the router market to 10.2%.