NEEDHAM, Mass.--(BUSINESS WIRE)--Worldwide Ethernet switch revenues declined 14.1% year over year in the second quarter of 2024 (2Q24) to $10.2 billion but rose 15.4% compared to the first quarter of 2024. Total worldwide enterprise and service provider (SP) router revenues declined 30.6% year over year to $3.2 billion in 2Q24. The results were published in the International Data Corporation (IDC) Worldwide Quarterly Ethernet Switch Tracker and Worldwide Quarterly Router Tracker.
Ethernet Switch Market Highlights
There were mixed results across the datacenter and non-datacenter portions of the Ethernet switch market. Revenues in the datacenter (DC) portion of the market rose 7.6% year over year and 15.8% sequentially from 1Q24 to 2Q24.
Total market revenues for 200/400 GbE switches rose 104.3% annually in 2Q24 and 35.7% sequentially, indicating strong interest in the highest-speed Ethernet switches used in datacenters. 100Gb Ethernet switch revenues rose 13.0% sequentially from 1Q24 to 2Q24. ODM (original device manufacturer) Direct sales continue to be a growing part of the datacenter segment, rising 66.9% year over year to make up 19.1% of the datacenter segment's market revenues.
The non-datacenter (non-DC) segment of the Ethernet switch market, which includes Ethernet switches typically deployed in enterprise campus and branch locations, declined 28.9% year over year, but increased 15.0% compared to the first quarter of 2024. The annualized decline was driven in part by difficult comparisons with the quarter from a year earlier, which had historically high revenues driven by product backlog drawdown. 1GbE switch revenue declined 35.7% on an annualized basis but rose 10.4% sequentially.
From a geographic perspective, the total Ethernet switch market declined 16.3% year over year but rose 12.3% sequentially in the United States. In Western Europe, the market fell 24.2% annually but grew 4.3% compared to the first quarter. In Central & Eastern Europe the market declined 27.7% year over year and increased 11.0% sequentially. In the Asia/Pacific region (excluding Japan & China), the market was down 14.8% year over year but rose 10.0% sequentially, while in the People's Republic of China, the market grew 8.7% annually and 49.9% sequentially.
"Ethernet switching is an important technology for enterprises, service providers, and cloud giants, as the cloud and AI eras continue to drive increasing demands on connectivity," said Brandon Butler, senior research manager, Enterprise Networks, IDC. "In the datacenter portion of the market, enterprises and service providers are building ever-faster Ethernet switch speeds to support rapidly expanding AI workloads. In the non-datacenter portion, Ethernet switch vendors are embedding AI capabilities in software management platforms to improve operations and performance. Combined, Ethernet switching remains one of the critical technologies powering digital and network transformation."
Router Market Highlights
The service provider segment of the router market, which includes both communications SPs and cloud SPs, made up 72.4% of the total router market and declined 35.2% year over year and 3.4% compared to the first quarter of 2024. Revenues in the enterprise segment account for the remaining share of the market and declined 14.9% annually but rose 14.7% sequentially. From a regional perspective, the combined service provider and enterprise router market in the Americas declined 34.8% year over year, was down 30.2% in the Asia/Pacific region, and fell 25.2% in Europe, Middle East & Africa.
Company Highlights
Cisco Ethernet switch revenues declined 36.6% year over year in 2Q24 but rose 2.1% from 1Q24 to 2Q24. Cisco's total Ethernet switch share stood at 34.8% in 2Q24, down from 47.1% in 2Q23. Cisco's combined service provider and enterprise router revenue declined 39.2% year over year in 2Q24.
Arista Networks Ethernet switch revenues – 90.2% of which are in the DC segment – increased 12.4% year over year in 2Q24 and 7.0% sequentially, giving the company 13.5% market share.
Huawei Ethernet total switch revenue increased 15.5% year over year in 2Q24 and rose 100.9% sequentially, giving the company market share of 12.0% in the quarter. The company's combined SP and enterprise router revenue declined 36.6% year over year in 2Q24, giving the company 30.4% market share.
HPE Ethernet switch revenue – 86.2% of which are in the non-DC segment – declined 25.2% year over year but rose 6.5% from 1Q24 to 2Q24, giving the company 6.2% market share.
H3C Ethernet switch revenue declined 3.7% year over year and rose 30.3% sequentially for a market share of 4.5% to end 2Q24. In the combined service provider and enterprise routing market, H3C's revenues decreased 1.7% year over year, giving the company 2.9% market share.
A graphic illustrating the worldwide market share of the top 5 Ethernet switch companies over the previous five quarters is available by viewing this press release on IDC.com.
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