International Data Corporation (IDC) has officially published results from its latest research, where it discovered that worldwide Ethernet switch revenues declined 14.1% year over year in the second quarter of 2024 (2Q24) to $10.2 billion but rose 15.4% compared to the first quarter of 2024. More on the same would reveal how total worldwide enterprise and service provider (SP) router revenues also declined 30.6% year over year to $3.2 billion during the given quarter. Moving on to datacenter and non-datacenter portions of the Ethernet switch market, it saw what was a mixed bag of results, whereas revenues in the datacenter (DC) portion of the market rose 7.6% year over year and 15.8% sequentially from 1Q24 to 2Q24. Next up, we must dig into the performance of 200/400 GbE switches, where total market revenues rose by 104.3% annually in 2Q24. A similar uptick was witnessed in the context of 100Gb Ethernet switch revenues, with the figures improving by 13.0% sequentially from 1Q24 to 2Q24.
Looking beyond that piece of growth, though, the report discovered how ODM (original device manufacturer) direct sales continue to be a growing part of the datacenter segment, rising 66.9% year over year to make up 19.1% of the datacenter segment’s market revenues. As for the non-datacenter (non-DC) segment, which is made up with Ethernet switches typically deployed in enterprise campus and branch locations, it went down 28.9% year over year, but increased 15.0% compared to the first quarter of 2024.
All in all, if we take a more geographic standpoint, the total Ethernet switch market declined 16.3% year over year but rose 12.3% sequentially in the United States.
“Ethernet switching is an important technology for enterprises, service providers, and cloud giants, as the cloud and AI eras continue to drive increasing demands on connectivity,” said Brandon Butler, senior research manager, Enterprise Networks, IDC. “In the datacenter portion of the market, enterprises and service providers are building ever-faster Ethernet switch speeds to support rapidly expanding AI workloads. In the non-datacenter portion, Ethernet switch vendors are embedding AI capabilities in software management platforms to improve operations and performance. Combined, Ethernet switching remains one of the critical technologies powering digital and network transformation.”
Turning our attention towards the number racked up by the router market, the service provider segment of the router market declined 35.2% year over year and 3.4% compared to the first quarter of 2024. This covers both communications SPs and cloud SPs, both the components making up 72.4% of the total router market. Furthermore, revenues in the enterprise segment account for the remaining share of the market and declined 14.9% annually but rose 14.7% sequentially. A regional breakdown of the same would reveal that the combined service provider and enterprise router market in the Americas declined 34.8% year over year.
Having referred to the wider landscape, we can now take a deeper, company-specific view of things. For instance, Cisco saw its Ethernet switch revenues declined 36.6% year over year in 2Q24. To go along with that, its total Ethernet switch share stood at 34.8% in 2Q24, down from 47.1% in 2Q23. Arista Networks, on the other hand, was able to improve upon its revenue by 12.4% year over year in 2Q24 and 7.0% sequentially, giving the company 13.5% market share. For Huawei, the Ethernet total switch revenue increased 15.5% year over year in 2Q24 and rose 100.9% sequentially, earning it market share of 12.0% in the quarter. The company’s combined SP and enterprise router revenue, however, declined 36.6% year over year in 2Q24,
Moving on to H3C’s revenue, it went down by declined 3.7% year over year and rose 30.3% sequentially. In the combined service provider and enterprise routing market, H3C’s revenues decreased 1.7% year over year, giving the company 2.9% market share.
Founded in 1964, IDC’s rise up the ranks stems from being the premier global provider of market intelligence, advisory services, and events for the information technology, telecommunications, and consumer technology markets. The scale of its operations can also be understood once you consider it currently has more than 1,300 analysts worldwide.
