* First quarter trips up LAN switch revenues
The robust activity around LAN switches that we saw at the Interop trade show this week was tempered by the release of market research that showed that the Ethernet switch market has shrunk.
As I mentioned last time, Foundry Networks led a charge ahead with its biggest chassis-based switch, the 5.1Tbps BigIron RX32. The network industry had a strong showing at Interop, as our editor-in-chief, John Dix, noted in an editorial.
Research firm Dell’Oro Group, however, then released a report showing a “substantial decline” in revenues for chassis-based Ethernet switches in the first three months of the year.
Seamus Crehan, senior director of Ethernet switch research at Dell’Oro, said the decline was greater than 10%. Chassis-based switches make up about half of the market; the other half is made up of fixed-configuration or stackable switches, which remained stable. So, the overall Ethernet switch market declined about 5% to about $4 billion in the quarter, the largest sequential decrease in more than five years.
North American enterprise companies spent less on network gear, and they tend to buy chassis-based switches more than other parts of the world, Crehan said.
So, why are those businesses spending less? Crehan said the overall economic outlook may have something to do with it. The economy is still growing, but more slowly.
Dell’Oro is forecasting the market to rebound later in the year, as it slowly recovers from this most recent quarter.
Cisco led the market for chassis-based switches, as you would expect. HP ProCurve is next, followed by Nortel, Foundry and Redback Networks.
