IDC's Worldwide Quarterly Ethernet Switch Tracker Shows Moderate Declines in 3Q24

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Worldwide Ethernet Switch Market Decreased 7.9% Year Over Year (YoY) in Q32024; Router Market declined 17.4%

NEEDHAM, Mass., December 12, 2024 – The worldwide Ethernet switch market recorded $10.8 billion in revenue in the third quarter of 2024 (3Q24), a 7.9% year-over-year (YoY) decline. Despite the annual drop, the market grew 6.6% from the second to the third quarters of 2024. The total worldwide enterprise and service provider (SP) router market declined 17.4% y/y to $3.1B in 3Q24. These findings are detailed in the latest editions of the International Data Corporation (IDC) Quarterly Ethernet Switch Tracker  and IDC Quarterly Router Tracker.

Ethernet Switch Market Highlights

The Ethernet switch market showed varying trends across the datacenter and non-datacenter segments. Revenues in the datacenter (DC) portion of the market rose 18.0% YoY and rose 6.2% sequentially from 2Q24 to 3Q24. Total market revenues for 200/400 GbE switches rose 126.3% YoY in 3Q24 and rose 23.8% from the second to the third quarter of 2024, indicating strong interest in the highest-speed Ethernet switches. ODM (original device manufacturer) Direct sales continue to be a growing part of the datacenter segment, rising 56.5% YoY, and comprising 19.4% of the datacenter portion of the Ethernet switch revenues.

The non-datacenter (non-DC) segment, primarily used in enterprise campus and branch deployments, declined 24.7% YoY, However, this segment rose 7.0% from the second to the third quarters of 2024. The annualized decline was attributed to challenging comparisons with the quarter from a year earlier, which had historically high revenues driven by product backlog drawdown. 1GbE switch revenue declined 25.6% on an annualized basis but rose 11.5% sequentially.

From a geographic perspective, in the United States, the total Ethernet switch market declined 6.5% YoY but rose 13.0% sequentially. In the US, the datacenter market increased 23.2% YoY while the non-datacenter segment fell 29.3% annually. In Western Europe, the market fell 11.9% YoY but rose 8.1% from 2Q24 to 3Q24. In Central & Eastern Europe the market declined 17.8% annually but rose 9.0% sequentially. In the Asia Pacific region, excluding Japan & China, the market declined 8.7% YoY but rose 4.7% sequentially, while in the People's Republic of China, the market was flat annually with a 4.7% sequential decline

"Ethernet switching is a critically important technology for enterprises, service providers and cloud giants, as connectively demands continue to rise in the cloud and AI era," says Brandon Butler, Senior Research Manager, Enterprise Networks, IDC. "While datacenter growth is fueled by high-bandwidth and low-latency AI workloads, the requirements are driving enterprises and service providers to deploy ever-faster Ethernet switch speeds. In the non-datacenter segment, Ethernet switch vendors are embedding AI capabilities into software management platforms to improve operations and performance, aligning with the market’s transition to more balanced supply-demand dynamics."

Router Market Highlights

The service provider segment of the router market, which includes both communications SPs and cloud SPs, made up 70.8% of the total router market and declined 22.3% YoY and 6.3% sequentially. Revenues in the enterprise segment account for the remaining share of the market and declined 2.4% annually but rose 1.2% sequentially. From a regional perspective, the combined service provider and enterprise router market in the America’s declined 24.8% YoY; the market was off 14.1% YoY in the Asia Pacific region and declined 9.3% YoY in Europe, Middle East & Africa.

Vendor Highlights

Cisco's Ethernet switch revenues declined 24.0% YoY in 3Q24 but rose 13.7% from 2Q24 to 3Q24. Cisco’s total Ethernet switch share stood at 37.2% in 3Q24. Cisco's combined service provider and enterprise router revenue declined 29.7% YoY in 3Q24.

Arista Networks Ethernet switch revenues – 90.4% of which are in the DC segment - increased 18.0% YoY in 3Q24 and rose 7.0% sequentially, giving the company 13.6% market share.

Huawei's Ethernet total switch revenue declined 6.6% YoY in 3Q24, giving the company a market share of 9.7% in the quarter. The company's combined SP and enterprise router revenue declined 13.4% YoY in 3Q24, giving the company 27.0% market share.

HPE's Ethernet switch revenue – 84.6% of which are in the non-DC segment – declined 36.4% YoY, giving the company 5.3% market share.

H3C's Ethernet switch revenue declined 7.1% YoY for a market share of 4.1% to end 3Q24. In the combined service provider and enterprise routing market, H3C's revenues decreased 8.7% YoY, giving the company 2.4% market share.

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About IDC

International Data Corporation (IDC) is the premier global provider of market intelligence, advisory services, and events for the information technology, telecommunications, and consumer technology markets. With more than 1,100 analysts worldwide, IDC offers global, regional, and local expertise on technology and industry opportunities and trends in over 110 countries. IDC's analysis and insight helps IT professionals, business executives, and the investment community to make fact-based technology decisions and to achieve their key business objectives. Founded in 1964, IDC is a wholly-owned subsidiary of International Data Group (IDG), the world's leading media, data and marketing services company that activates and engages the most influential technology buyers. To learn more about IDC, please visit www.idc.com. Follow IDC on Twitter at @IDC  and LinkedIn.

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