Gartner: Ethernet on the Rise

Gartner/Dataquest says Ethernet switching shipments are on the rise, but revenue remains flat in third quarter of 2002

November 27, 2002

1 Min Read

SAN JOSE, Calif. -- The worldwide Ethernet switching industry received a boost in shipments in the third quarter of 2002 versus the same period last year, but revenue did not grow as quickly, according to preliminary results from Dataquest Inc., a unit of Gartner, Inc. (NYSE: IT and ITB).Worldwide Ethernet revenue totaled $2.9 billion in the third quarter of 2002, a 1.3 percent increase from the same period last year (see Table 1). Worldwide Ethernet port shipments reached 39.5 million units, a 21.7 percent increase from the third quarter of 2001 (see Table 2).Cisco continued to dominate the market with 72.9 percent of worldwide Ethernet switching revenue and 41 percent of port shipments. 3Com moved into the No. 2 position based on revenue, up from the No. 5 position in the third quarter of last year. Several vendors, such as Cisco, 3Com and Hewlett-Packard, have introduced fixed configuration Layer 3 switches with gigabit ports."These switches are primarily targeted at the aggregation layer of the midsize and large enterprises," said Rachna Ahlawat, senior analyst for Gartner Dataquest's Enterprise Networking and Communications Worldwide group. "The switches are competitively priced in comparison to the Layer 2 switches. They are becoming increasingly popular among enterprises looking for a cost-effective solution with a limited budget, and yet protect their investment for deploying newer applications such as video and Internet Protocol (IP) telephony."{TABLE 1}Layer 3 switches represented 13 percent of the total Ethernet switches port shipments, and accounted for 48 percent of manufacturer revenue. The third quarter of 2002 was the first complete quarter of 10Gb port shipments. Gartner Dataquest estimates that this segment accounted for $13 million in manufacturer revenue.{TABLE 2}Gartner/Dataquest

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