Market in 2010 will be driven by 10G, unified fabrics, consolidation
Next-generation data center initiatives are driving the LAN switching market and its consolidation into 2010. 2009 saw the Ethernet switch industry consolidate a bit more to address the data center opportunity, and also to compete more intensely with Cisco, which owns 70% of the Ethernet switching market but still has an insatiable appetite for growth.
This year, HP bought 3Com, Avaya acquired Nortel’s enterprise business, and Brocade and Juniper lined up high-profile OEM deals with IBM and Dell after entering the Ethernet switch market in 2008. With the exception of Avaya, “big data center vendors are driving LAN switching decisions, and purchases, ” says Zeus Kerravala, an analyst with The Yankee Group. “Where innovation’s been needed is in the data center.”
Avaya, meanwhile, covets Nortel’s installed telephony base.
Instead of “Cisco and the Seven Dwarves,” the LAN switching market is now driven by Cisco, IBM, HP and Dell, and perhaps Brocade. And data center deployments of 10G Ethernet are helping to drive the market, according to Dell’Oro Group.
The firm expects the global Ethernet switching market to grow modestly in 2010, to $16.3 billion from $15.6 billion in 2009. This is down considerably though from the $19.3 billion market in 2008, Dell’Oro notes.
So the best place for an Ethernet switch vendor to be next year is with a major server OEM partner, analysts say.
“It’s a pretty mature market,” Kerravala says. “The ability to attract new customers is limited.”
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