A new report found that Cisco continued to lead the global switch and router market last year.
According to Synergy Research Group, the global switch and router market reached a record high of $12 billion in the fourth quarter of 2018. Throughout the year, suppliers generated $44 billion in revenue, a 4% increase from 2017.
“This huge market has been slowly expanding year after year,” SRG analyst John Dinsdale said in a statement. “We don’t expect this trend to change soon.”
According to SRG data, Cisco still dominates the market, with switches and routers accounting for 51% in the fourth quarter of 2018. This is far ahead of Huawei, Nokia, Juniper Networks, Arista Networks, and HP Enterprises. Others tracked by SRG include Ericsson, Extreme, H3C and ZTE.
Dinsdale said that Huawei’s market share is rising, and Arista “has a huge threat in large high-speed switches.”
The report found that Huawei accounted for 14% of the switch and router market in the fourth quarter. Arista is only active in the switch market, mainly in high-speed switches. Even so, as a relatively new person, Arista has accounted for 7% of the entire switch market. Dinsdale added that in one of the high-speed switching areas, Arista has a market share of over 50%.
However, he does add that “Cisco has not moved from market leadership.”
Cisco leads the Ethernet market
Another report from the 650 Group found that Cisco also dominates the global Ethernet switch market. The market itself grew by 10% in 2018.
The company found that Cisco controlled 59% of the corporate/campus market in 2018. This is followed by HPE with a 10% market share and Huawei with an 8% market share. For the data center switch market, the 650 Group has a 43% market share in Cisco, followed by Arista with 13%, Huawei with 8%, and Juniper with 5%.
In contrast, the 650 Group said that the routing market generated $17.5 billion in revenue last year. Combined with routing and switching, the 650 Group received a total of $48.5 billion in the market, surpassing SRG’s $4 billion in $4 billion.
Alan Weckel, an analyst at 650 Group, predicts that the data center switch market will remain “strong” in the next two years as efforts are made to migrate workloads to the cloud. “This is a very healthy market,” he said in an interview.
On the other hand, the campus/enterprise conversion market will grow at a low single digit in the next two years and they tend to be flat. Weckel said that within five years, the market will start to decline, in part because more network connections will be made via WLAN.
Huawei is expected to benefit from the growth of the local market. The 650 Group noted that trade wars and tariffs involving China were small at the end of 2018, but may affect Chinese suppliers that were sold in the US in early 2019.
If trade negotiations result in tariffs or a total ban on Chinese-made products, this could affect US companies that use Chinese-made parts manufacturing switches. Weckel said that if the switch has a power supply, a copper connector, a circuit board, or even a metal plate made in China, it may be affected by tariffs, thereby increasing the price.
The end result of the tariff is that part of the switch production supply chain “will move out of China and will never come back,” he said. “It has already happened.”
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