Good News on Ethernet Is Good News for All

Carl Weinschenk

It's refreshing to find an area where the news seems to be all good. The Ethernet market, according to research from a trio of organizations that cover the carrier and enterprise sectors, is on the upswing. An announcement by Sprint seems to be a piece of evidence backing the position.

This week, IDC said its worldwide quarterly enterprise network tracker noted a 35.3 percent year-over-year growth in Ethernet switch revenues. The release says there was a 15.1 percent increase in Ethernet router revenue.This passage from the release summed up the good feelings in the industry:


"The first quarter was an exceptionally good quarter for the Ethernet switch market," said Rohit Mehra, director, Enterprise Communications Infrastructure at IDC. "Typically, first calendar quarters tend to be seasonally weak, but 1Q10 was quite different. We are once again seeing growth in the Ethernet switch market being driven by healthy underlying networking drivers-the growth of voice and video over IP, network-based businesses and applications, network-attached devices, virtualization, and cloud computing-and that the negative impact of the macroeconomic conditions of 2009 is subsiding."

The release gave a lot of reasons for the strong performance, and said the nascent 10 gigabit Ethernet (10 GbE) category saw a 111.2 percent year-over-year increase. The category surpassed the $1 billion market for the first time, finishing the quarter with revenues of $1.15 billion.

The carrier Ethernet segment-Ethernet provisioned by phone companies-also got good news. Network World reports that Synergy Research found that the combined equipment and services segments of that market grew 27 percent in the first quarter, reaching $2.34 billion. The release also provides reasons for the increase, and maps out the top three finishers. The release has some vendor numbers. Though the numbers are sketchy -- the full picture is drawn for the folks who pay for the studies -- the figures point to Cisco, Juniper and Alcatel-Lucent as the top three vendors. Latin American sales grew by 50 percent, North American by 37 percent, and emerging markets by 36 percent.

Infonetics actually released two enterprise-based reports
-one on Ethernet switches and the other on Ethernet routers. One press release covers both. It says that the rebound in the switch sector was enabled by a better economy, pent-up demand and fulfillment of existing orders. The release says that Cisco's Ethernet switch revenue rose 17 percent, and the other vendors did a bit more than break even with combined 1 percent growth. The release says that the overall switch revenues rose 12 percent compared to the last quarter of 2009, finishing at $4.6 billion.

Infonetics said that the router market held almost stead, dropping a half percentage point to $818 million. That isn't really bad news, considering that the sector kept almost all of its fourth quarter 2009 gain of 10 percent. The release offers other highlights from the two reports.

Anecdotal evidence of the renewed strength of the Ethernet category in general and the carrier side in particular can be deduced from Sprint's expansion of its services to central and northern New Jersey, Baltimore and Stockton, Calif. The company also increased existing coverage in 10 U.S. markets. The release says Sprint now offers services to 28 markets domestically and is active in 35 countries. It will expand coverage in 16 existing domestic markets by the end of 2010.

This obviously is good news for the Ethernet market. It also is worthwhile to note that an upswing in demand for a networking platform obviously means more traffic is flowing and more business being done. That's good news for the rest of the telecom and IT industries.

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