Digital transformation initiatives and emerging technologies are forecast to lift router and switch sales this year, according to IDC, which observes that 2016 witnessed a steady growth period for networking vendors. In 2016, Ethernet switch sales amounted to $24.4bn, a 2.4 per cent annual increase. The enterprise service provider (SP) router market also grew 1.3 per cent to $14.58 bn annually, according to IDC.
On a geographical level, western Europe saw minor growth in Ethernet switch sales in 2016 with a 0.8 per cent improvement on last year. In the fourth quarter Belgium was the continent’s biggest grower hitting a 33.5 per cent annual growth in sales, while Romania hit 21.3 per cent growth. The Middle East and Africa reported a 4.7 per cent annual boost to Ethernet switch sales, while the Americas enjoyed a minor 0.4 per cent boost.
The enterprise and SP router market meanwhile suffered declines in Europe, as western European sales dropped by six per cent annually in Q4, with CEE sales tumbling 3.7 per cent, according to IDC. MEA sales grew by 5.2 per cent over last year while North America hit 3.4 per cent growth annually.
Cisco still controls the majority of the Ethernet switching market with a share of 57 per cent for the full 2016 year, albeit down from 60.6 per cent reported in 2015. The networking giant also shed market share on the router side, with enterprise and SP router revenues for 2016 falling by 5.1 per cent on an annual basis to $6.54bn. Market share in Q4 fell to 42.2 per cent, from 45 per cent reported in Q4 of 2015, according to IDC.
Notable is, Huawei has seen the strongest growth in Ethernet switch sales, growing 61.8 per cent year over year in 2016, translating to a market share of seven per cent compared with 4.4 per cent in 2015. The vendor’s router revenues also grew in 2016 by 21.2 per cent, equating to a 17.7 per cent share of the market.
Hewlett Packard Enterprise’s (HPE) Ethernet switch revenue fell 2.2% quarter over quarter in 4Q16 and its market share stands at 5.0% in 4Q16, down from its 5.5% share in 3Q16. Juniper’s Ethernet switching increased 2.9% year over year in 4Q16, while decreasing 2.8% for the full year. Juniper also saw a 6.5% year-over-year increase in combined service provider and enterprise router revenues, with market share of 16.9%. For the full year 2016, Juniper’s router revenues increased 3.5%, for a market share of 16.1%.
“Digital and network transformation initiative s and emerging ’software-defined’ architectures are leading to myriad new opportunities for networking vendors, service providers, systems integrators, and enterprises,” said Petr Jirovsky, research manager, Worldwide Networking Trackers. “This is playing out in different ways across sub-markets depending on how prepared vendors and geographies are to adapt.”