Sep 27, 2013
The seemingly endless Ethernet exultation over hitting the big 4-0 continues with the Ethernet Alliance hosting its celebration on October 15 under the theme of The Future of Ethernet. According to Bob Metcalfe, the Father of Ethernet, who will be the featured guest at the event, “Ethernet is a brand — a brand of innovation!” Whatever Ethernet is, its popularity is higher now than ever before, and its future looks very bright, according to a number of new studies from Crehan Research, Dell’Oro Group, IDC, Infonetics Research, and Insight Research.
Released at the start of September, Crehan’s Data Center Switch Report found that 10 Gigabit Ethernet price declines drove ‘exceptionally strong growth’ in this segment, especially in the fixed/top-of-rack switch segment — accounting for a majority of overall data center switch shipments, this segment is now almost at three times that of 1GbE.
“Offering ten times the bandwidth for only three times the price of 1GbE is a key threshold for 10GbE data center Ethernet switch adoption,” said Seamus Crehan, president of Crehan Research. “This type of pricing should finally drive mainstream 10GbE data center switch adoption.”
The Enterprise Edge market reached almost $3.5 billion in the second quarter, up 2% from 2Q12, according to Dell’Oro’s Enterprise Edge Quarterly Report. “Much of the installed base of Ethernet switches that are 802.3af-capable may not be adequate to service 802.11ac wireless,” said Chris DePuy, Vice President of Enterprise Edge research at Dell’Oro Group. “Newer switches have more power available, yet the throughput needs of 802.11ac may require multiple Gigabit Ethernet ports or even 10 Gigabit per second ports which may drive additional in-building cabling.”
The 2Q numbers were a little less impressive in IDC’s Worldwide Quarterly Ethernet Switch and Router Tracker, with a year-over-year decline of -1.1% to $5.4 billion, although it did increase 4.9% in the U.S. “The worldwide Ethernet switch market is increasingly a tale of two market segments with different market dynamics — the enterprise campus segment, which includes the network edge, and the higher growth datacenter segment that is driving 10GbE and 40GbE growth as cloud rollouts continue to increase,” said Rohit Mehra, Vice President, Network Infrastructure at IDC.
IDC reported that 10Gb Ethernet switch (Layer 2/3) revenue increased 12.9% year over year to $2.0 billion, while 10Gb Ethernet switch port shipments grew a strong 52% year over year to 4.7 million ports in 2Q13. While 10GbE continues to be the primary driver of the overall Ethernet switch market, the early stage 40GbE is starting to reach critical mass as a stand-alone segment.
It was a much rosier picture for Ethernet in the 2Q13 service provider segment, according to Infonetics’ 2nd quarter 2013 (2Q13) Service Provider Routers and Switches report, with router and switch revenue up 27% from 1Q13, to $4 billion. “The 2nd quarter is usually up for carrier routers and switches, but this one is exceptional given the sluggishness of the past few years,” reports Michael Howard, principal analyst for carrier networks and co-founder of Infonetics Research.
Finally, US business spending on carrier Ethernet services is expected to exceed $5.5 billion this year, and reach more than $49 billion over the next five years, according to Insight’s US Carriers and Ethernet Services, 2013-2018. “Over the five year forecast period we project a compounded annual revenue growth rate of 19 percent, with the highest growth levels in the next two years,” said Fran Caulfield, Director of Research at Insight.
The various Ethernet results, from enterprise and data center, to carrier and service provider, and from 2Q 2013 to 2017, show that Ethernet is continuing to gain momentum 40 years after its debut. With 400GbE already in the works, and 1.6TbE being talked about as the next iteration, the Future of Ethernet looks rock solid.
Image credit: Buck (flickr)