According to International Data Corporation (IDC (News - Alert)), a global provider of market intelligence, research and finds, the worldwide Layer 2-3 Ethernet switch market reached $5.66 billion in the third quarter of 2013, which set a revenue record and accounted for nearly 40 percent of the overall Ethernet switch market. It also represented a year-over-year increase of 6.5 percent.
Although growth was not as high in Q4 of 2013, the Ethernet switch market showed encouraging results for the last period of the year. Overall, it has become one of the fastest growing networking markets to date, according to IDC. The growth has been attributed to the growing popularity of 10 Gigabit and 40 Gigabit Ethernet in data centers.
According to a post on the Dell (News - Alert)'Oro Group’s website, a Redwood City, Calif., market research group specializing in telecom and networking, “the Layer 2-3 Ethernet switch market exceeded $22 billion in 2013, with most segments achieving record revenues during the year.”
As mentioned in a recent Yahoo Finance post, the revenue performance in the overall Ethernet switch market for 2013 was largely due to original design manufacturers (ODM) offering custom options for cloud customers. Nowadays, many of the original equipment manufacturer (OEM) vendors are meeting customer demands and are offering an option for customization. As a result, they sold nearly 10 percent of all servers and cloud datacenters were buying nearly 40 percent of Ethernet switches, as seen by the 2013 Q3 findings.
According to Alan Weckel, vice president of Ethernet switch market research at Dell'Oro Group, in 2013, white box switching gained momentum especially for mega Cloud providers and “sales into enterprise customers also outpaced the market overall with many vendors in this segment achieving record years.”
Weckel anticipates overall market growth will continue in 2014; the growth is said to come from data centers’ continuous investments and drive of Ethernet sales from Q3 on, in which there have been more cloud rollouts of 10 Gigabit and 40 Gigabit Ethernet.
Another report, titled “Global Data Center Ethernet Switch Market,” shows good prospects for the coming years, stating growth as well: at a CAGR of 16.27 percent over the period 2013-2018. This source has produced in-depth market analysis on the subject.
Edited by Alisen Downey