IDC: Virtualization boosts Ethernet switch sales

Cisco dominates Ethernet switch market with 65.8 percent revenue share during the second quarter

Ethernet switch revenue grew by 32.7 percent year-over-year during the second quarter, helped by the growing popularity of applications such as virtualization and VoIP, according to IDC's Worldwide Quarterly Enterprise Networks Tracker.

The actual growth comes from continued adoption of technologies such as Gigabit Ethernet and Power over Ethernet. The adoption of the latter technology is driven by the need to power IP phones and access points for wireless LANs, according to Rohit Mehra, director of Enterprise Communications Infrastructure at IDC.

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IDC's research also shows an 87.9 percent year-over-year increase in the revenue from 10-Gigabit Ethernet, and for the first time there were more than 1 million ports shipped in one quarter. The increased use of 10-Gigabit ethernet is driven by virtualized data centers and cloud computing, IDC said.

The adoption of virtualization has led to a more centralized networking architecture, which increases the need for more networking capacity in the data center, according to Mehra.

Cisco continues to dominate the Ethernet switch market, and its revenue share increased to 65.8 percent in the second quarter, up from 62.8 percent during the same period in 2009. However, Cisco's second-quarter share was down sequentially from 68.3 percent in 2010's first quarter, which was an exceptionally strong quarter for the company, according to IDC.

Hewlett-Packard came in second place with an 8.1 percent revenue market share, which for the first time includes 3Com's sales numbers and sales from 3Com's Chinese subsidiary H3C. HP acquired 3Com in April.

The battle is closer if the number of Ethernet ports sold are counted; about 32 million for Cisco versus 16 million for Hewlett-Packard, IDC said.

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