The 10 Gigabit Ethernet switch market reached two milestones in the second quarter of this year, according to a recent report from Dell'Oro Group.

Port shipments of the high-speed version of Ethernet reached 250,000, while revenues to switch makers reached $600 million.

The milestones were reached at a time when, as Dell'Oro points out, the Ethernet switch market is converging technologies and consolidating vendors. Dell'Oro notes the Siemens joint venture that combines Enterasys Ethernet switching with Siemens voice networking; HP's acquisition of Colubris for wireless LAN technology; and Brocade's high-profile acquisition of Foundry Networks to build data center switches.

The research firm notes that manufacturers will soon be shipping adapters and switches supporting Fibre Channel over Ethernet, and that will facilitate convergence of storage networking onto Ethernet networks. Dell'Oro predicts that 2009 will be a "bumpy transitional year" for FCoE, but that 2010 should be the year when sales really kick in.

Also putting pressure on enterprise networks are the iPhone, ultra-portable PCs and other Wi-Fi-enabled devices. Dell'Oro expects those devices to really drive deployment of enterprise wireless LANs - to the point where the market for such equipment closes in on $4 billion in 2012. Meanwhile, revenues from wireless LAN equipment sold to service providers should triple between 2007 and 2012, the research firm says.

In related news, Dell'Oro says the market for worldwide optical transport equipment grew to a new quarter high of $3.5 billion. Revenues were up 13%, which Dell'Oro says was way over expectations. Equipment supporting Dense Wave Division Multiplexing (DWDM) grew 24%, with service providers putting in more 40-gigabit wavelengths.

Jeff Caruso is site editor at Network World.