The worldwide Ethernet switch market grew revenues 31,5% year over year in the first quarter of 2023 (1Q23) to $10-billion.
The total worldwide enterprise and service provider (SP) router market recorded $4,1-billion in revenue in 1Q23, a 14,1% annual increase.
These growth rates are according to results published in the International Data Corporation (IDC) Worldwide Quarterly Ethernet Switch Tracker and Worldwide Quarterly Router Tracker.
Ethernet switch market
The Ethernet switch market’s growth of 31,5% in 1Q23 builds on annualised growth of 3,3% in 4Q22 and 19,4% for the full year 2022.
In 1Q23, the Ethernet switch market showed strength across both the datacentre and non-datacentre segments of the market.
Revenues in the non-datacentre/enterprise campus and branch segment grew 38,7% year over year, while port shipments rose 14,1%. Revenues in the datacenter portion of the market rose 23,2% year over year in 1Q23, while port shipments increased 19,7%.
The higher-speed segments of the Ethernet switch market continue to see strong growth, driven by hyperscalers and cloud providers building out datacentre network capacity.
Market revenues for 200/400 GbE switches rose 141,3% annually in 1Q23 and were up 14,3% sequentially from 4Q22 to 1Q23. 100GbE revenues increased 18,2% year over year in 1Q23. 25/50 GbE revenues increased 21,1% in 1Q23.
Lower-speed switches, which are typically deployed in enterprise campus and branch locations, showed strength too.
Revenues for 1GbE switches rose 43,7% year over year in 1Q23. 10GbE switches rose 9,7% year over year in the quarter. 2.5/5GbE switch revenue – also known as multi-gigabit Ethernet switches – rose 128% year over year in 1Q23.
From a geographic perspective, the Ethernet switch market saw growth in most regions of the world.
In the Asia/Pacific region (excluding Japan and China), the market grew 31,8% year over year, but in the People’s Republic of China, the market fell 5%. In the US, the market rose 40,3% while Canada’s market increased 39,1% year over year. The Latin America market rose 65,3% in the quarter. In Western Europe, the market rose 36,1% annually while in Central and Eastern Europe the market increased 16,4%. The Middle East & Africa region saw market growth of 40,4% in the quarter.
“The Ethernet switch market continued to show strong growth rates in the first quarter of 2023, driven by a variety of factors,” notes Brandon Butler, research manager: enterprise networks at IDC. “One significant factor is the continued easing of component shortages, which is allowing vendors to recognise revenues from fulfilling backlogged product orders.
“Meanwhile, connectivity remains another important market driver as enterprise, service providers, and hyperscalers continue to deploy ever-faster Ethernet switching capacity to meet the demands of a digital-first world.”
Router market
The service provider segment, which includes both communications SPs and cloud SPs, accounted for 77,7% of the market’s total revenues.
The service provider segment of the market increased 13,1% year over year in 1Q23. Revenues in the enterprise segment account for the remaining share of the market and rose 17,6% compared to the first quarter of 2022.
From a regional perspective, the combined service provider and enterprise router market in the Americas rose 30,4%, while in the Asia/Pacific region (including China and Japan), the market rose 6,7%. In the Europe, Middle East & Africa (EMEA) region, the market was up 1,3%.
Vendor highlights
Cisco’s Ethernet switch revenues increased 33,7% year over year in 1Q23, giving the company a market share of 46%. Cisco’s combined service provider and enterprise router revenue grew 18,2% in the quarter, giving the company a market share of 37,9% in 1Q23.
Arista Networks saw Ethernet switch revenues increase 61,6% year over year in 1Q23, giving the company 11,4% market share.
Huawei’s Ethernet switch revenue increased 5,5% in 1Q23, giving the company a market share of 6%. The company’s combined SP and enterprise router revenue rose 2,7%, giving the company a market share of 23,6% in the quarter.
HPE’s Ethernet switch revenue increased 54,9% in 1Q23, resulting in a market share of 7%.
H3C’s Ethernet switch revenue declined 15% year over year 1Q23, giving the company a market share of 3,6%. In the combined service provider and enterprise routing market, H3C’s revenues decreased 10,3% in 1Q23, resulting in a market share of 1,6%.