RealTime IT News

10 Gigabit Ethernet Market Continues to Grow

The Ethernet switch market continues to grow thanks to the proliferation of products based on 10 Gigabit Ethernet (GbE).

However, the high-speed Ethernet technology still has a lot of ground to pick up for it to become dominant, according to a recent report from Dell'Oro Group.

The research firm said annual revenues for 10 GbE switch ports represented more than $1 billion in 2006. In the fourth quarter of 2006, vendors shipped more than one hundred thousand 10 GbE ports.

Cisco  dominates the 10 GbE switch market with close to 70 percent of the market's revenue share. The No. 2 player is Force10, which holds only 6 percent. Foundry Networks, Nortel, Extreme and HP ProCurve round out the top six vendors by revenue in the 10 GbE market.

The overall Ethernet switch market is on an upward trend, according to a recent report from Infonetics Research. Infonetics claims Ethernet switch sales will soar to $18.6 billion in 2009, which is a 20 percent gain over the $15.6 billion reported for 2006.

Infonetics pegs Cisco as the overall leader in the Ethernet switch market with a 2006 tally of more than $10 billion in revenue.

Revenue growth is being fueled by an increase in port shipments with a 17 percent gain for the year in 2006 over 2005 shipments.

Increased port shipments don't always translate into increased revenue gains. The 10/100 Mbps switch segment grew shipments by 11 percent even though revenue fell.

Infonetics also sees tremendous growth in 10 GbE, with 2006 shipments doubling their 2005 mark. The growth of 10 GbE was somewhat of a surprise to Infonetics analyst Matthias Machowinski.

"While I expect strong growth there, that was a little more than expected," Machowinski told internetnews.com.

Dell'Oro Group analyst Seamus Crehan agreed that 10 GbE is the fastest growing segment of the Ethernet Switch market. Though, on an overall basis, 1 GbE and Power over Ethernet (PoE) are also very important growth drivers.

"1 GbE is just starting to go to the desktop and 10 GE is starting to be deployed in backbone and aggregation applications," Crehan told internetnews.com.

Infonetics' Machowinski noted that 10 GbE is a driver of overall Ethernet growth though in 2006 it accounted for only 88,000 ports out of 86 million shipped.

"Granted, 10G prices are higher, but this was a $16 billion market in 2006," Machowinski said. "The growth is in 1G, then PoE, then 10G."

"10G will add $200 million to market growth in 2007, 1G 4 times that," Machowinski added. "In my forecast model, 10G won't be overtaking 1G anytime soon, certainly not in this decade."