Cisco had a "blowout quarter" in Ethernet switching, growing revenue 18% in Q3 and upping its share to 68% of the total market, according to Infonetics Research. This, after Cisco had a few down quarters from heightened competition, a nettlesome product transition and operational distractions.
Infonetics credits Cisco's internal reorganization - enacted after its switching business lost some profitability in the company's last fiscal year - and reinvigorated aggression with helping to turn its switching business around. Cisco gained almost three points of market share, mostly at the expense of HP, Infonetics found. HP is undergoing substantial challenges right now, having recently replaced its CEO and grappling with other organizational and operational issues.
Infonetics found that HP's share dropped to 10.5% in Q3 from 12.8% in Q2, and 11.1% a year ago.
According to the Toronto Star, research firm Morningstar says it has not sen any material gains from HP or Juniper in Q3, citing data from Infonetics competitor IDC. As a result, Morningstar says Cisco will likely maintain its momentum into the new year:
Given HP's recent operational issues, and Juniper's delayed launch and nascency of its QFabric data center products, we think Cisco is well positioned to maintain its market share in 2012.
The worldwide Ethernet switch market reached $5.9 billion in Q3, a 6.1% hike from last year, and a 10.9% jump over Q2, according to IDC. IDC also found that Cisco had a 73% share of the 10G Ethernet switch market in Q3.
Infonetics says the market grew 13% from Q2 to $5 billion after a weak first half of 2011. It also found that 10G ports had the highest growth, up 21% from Q2, and almost double that of a year ago. Growth was driven by data center upgrades, 10G server adoption, server virtualization, and core network buildouts, the firm said.
The global market for 40G Ethernet was $6.5 million.
Juniper, the No. 3 Ethernet switch vendor to Cisco and HP, saw sequential growth of 6% in revenue and 12% in ports. The company is still growing at double digits annually, according to Infonetics.
Ethernet switch average selling prices have declined over 20% the past year, but now vendors are holding the line on discounting, Infonetics says.
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