Cisco Rules L4-L7 Switch Market

SAN JOSE, Calif. -- The worldwide layer 4–layer 7 switch/load balancer market bounced back with a 13% increase in revenue between 2Q04 and 3Q04, after a 5% decline between 1Q04 and 2Q04, according to Infonetics Research's quarterly market share and forecast service, L4–L7 Switches and SSL Products. Unit shipments increased 5% over 2Q04, and will grow in the low single digits from 1Q05 through 3Q05.

As there are no compelling applications driving increases in L4–L7 products right now, vendors are struggling to maintain revenue at current levels, though some are expected to see low single-digit growth in the coming quarters. The growth, albeit slow, in annual worldwide revenue through 2007 is being driven mainly by SSL-enabled L4–L7 switch/load balancers.

“For the third quarter in a row, revenue for layer 4–layer 7 switch/load balancers with SSL increased in the low double digits, growing 11% in 3Q04 to $58 million,” said Matthias Machowinski, directing analyst with Infonetics Research and author of the report. “Many companies have been integrating SSL functionality into their high-end switching portfolios over the last year, and SSL-enabled products now make up 38% of the total layer 4-layer 7 switch/load balancer market. That's a significant portion, and we expect to see it increase further through 2007.”

3Q04 Market Highlights

L4–L7 Switches and SSL Products tracks SSL server peripheral cards and dedicated SSL appliances, and layer 4–7 switches/load balancers with and without SSL. Forecasts are updated quarterly and cover all regions (worldwide, North America, EMEA, Asia Pacific, and CALA). Companies tracked in this service include AEP, BlueCoat, Broadcom, Cisco, Dell, Extreme, F5, Foundry, Hewlett-Packard, nCipher, NetScaler, Nokia, Nortel, Radware, SonicWALL, TopLayer, and others.

In a separate release:

SAN JOSE, Calif. -- Worldwide layer 2 through layer 3 Ethernet switch port shipments increased 15% and revenue increased 6% to $3.8 billion between 2Q04 and 3Q04, according to Infonetics Research's quarterly market share and forecast service, L2–L3 Ethernet Switches.

“The strongest growth this quarter came from 10G chassis switches, similar to last quarter,” said Matthias Machowinski, directing analyst with Infonetics Research and author of the report. “Cisco and other vendors have been targeting this segment with significant price reductions to persuade end-users to migrate to Gigabit speeds. Our demand-side research confirms solid demand for Gigabit Ethernet ports over the next couple of years, but there are few environments today that require Gigabit speeds to the desktop, which will be a limiting factor in wide-scale adoption of 10G in the network core.”

3Q04 Market Highlights

L2–L3 Ethernet Switches tracks layer 2 and layer 3 Ethernet switches, broken out by fixed configuration switches and chassis switches. Both sub-categories are broken out by 10G, 1G, and 100M switches. Forecasts are updated quarterly and cover all regions (worldwide, North America, EMEA, Asia Pacific, and CALA). Companies tracked in this service include 3Com, Alcatel, Allied Telesyn, Avaya, Cisco, D-Link, Enterasys, Extreme, Foundry, Hewlett-Packard, NETGEAR, Nortel, SMC, and others.

Cisco Systems Inc.