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Cisco Stretches 10-GigE Lead

Light Reading
News Analysis
Light Reading
11/24/2004

Cisco Systems Inc. (Nasdaq: CSCO) pulled away from its competitors in the 10-Gbit/s Ethernet race during the third quarter of 2004, according to figures released yesterday from Synergy Research Group Inc.

For the third quarter of 2004, Cisco nudged up to achieve a 75 percent market share in terms of 10-Gbit/s Ethernet revenues, compared with 70 percent in the second quarter, according to Synergy's research.

Runner-up Foundry Networks Inc. (Nasdaq: FDRY) slipped into reverse gear. It registered 11 percent of the third quarter's total 10-Gbit/s Ethernet revenues, compared with 16 percent in the second quarter.

Overall shipments of 10-Gbit/s Ethernet surged during the quarter, with revenues climbing 44 percent from the previous three months to reach $88 million, according to Synergy.

And the new demand appears to be coming from Cisco's heartland. "There's more interest from mainstream customers," says Synergy analyst Joshua Johnson. "Cisco's large customer base really is starting to find 10-Gbit/s Ethernet useful."

Third-place player Force10 Networks Inc. also lost ground. While its port shipments increased slightly in the third quarter, its market share by revenues fell to 7 percent from 9.5 percent in the previous three-month period.

Foundry held the 10-Gbit/s Ethernet lead for most of 2002 and parts of 2003, but Cisco pulled ahead late last year after releasing a four-port module that knocked down prices (see Cisco Bombs 10-GigE Pricing). Foundry's latest move in the price war -- to $2,500 per 10-Gbit/s Ethernet port on a new stackable switch -- was announced in November, so the impact of that move will likely first appear in the next set of quarterly tallies (see Foundry Drops 10-GigE Prices).

Foundry is quick to point out that it has retained the lead in Layer 3 10-Gbit/s Ethernet switching, however. Figures from the Dell'Oro Group last week placed Foundry's share in this category at 45 percent in terms of port shipments, or 42.6 percent by revenues (see Foundry Dominates Layer 3 10-Gig).

Competition could get tougher next year, as more players join the 10-Gbit/s Ethernet fray. The third quarter marked the debut of D-Link Systems Inc. in Synergy's numbers, and earlier this month, 3Com Corp. (Nasdaq: COMS) introduced its first 10-Gbit/s Ethernet switch, developed through its partnership with Huawei Technologies Co. Ltd. (see 3Com Goes to 10GigE).

— Craig Matsumoto, Senior Editor, Light Reading




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