Increased spending predicted for Ethernet switches

Are you about to raise your spending on Ethernet switches? Infonetics Research is predicting that many companies will over the next few years.

In a recent report, the firm says it saw the market for Layer 2 and Layer 3 switches growing in the first half of this year and is expecting that growth to continue steadily through 2006.

The worldwide market for Ethernet switches edged up 4% between the first and second quarters of this year, to $2.6 billion. Infonetics expects the market to grow 21% between this year and 2006, from a total of $11.2 billion to $13.6 billion. The research firm says that enterprise companies are starting to spend more on network infrastructure.

Cisco dominates Ethernet switches, of course – but Infonetics says the network giant’s market share is down significantly from the previous quarter, especially when it comes to 10 Gigabit chassis. This segment had the strongest growth, as vendors lowered prices to lure users, Infonetics says. Cisco has 41% of the revenue in that category, and 39% of the ports shipped; that’s down from 52% and 51% in the previous quarter, respectively.

Foundry Networks, on the other hand, increased its revenue share from 7% to 29%, and its port market share from 10% to 32%. Extreme Networks has revenue share of 18%.

Still, when you look at the overall switch picture, Cisco retains 61% revenue market share and 40% of the port share, which Infonetics says is a slight decline from the first quarter.