PDF version of this report
You must have Adobe Acrobat reader to view, save, or print PDF files. The reader
is available for free
download.
Switches
Market Trends
Copyright 2019, Faulkner Information Services. All Rights Reserved.
Docid: 00021530
Publication Date: 1907
Report Type: MARKET
Preview
In a telecommunications market where the preeminent demand is for speed and bandwidth, switching has become
the dominant medium for converged communications. With millions of newly deployed ports from a host of vendors, interoperable standards-based switches running at
lightning fast speeds are transforming the backbones of multi-tiered telecommunications networks into hyper-switching platforms.
Report Contents:
- Executive Summary
- Market Dynamics
- Market Leaders
- Market Trends
- Strategic Planning Implications
- Web Links
Executive Summary
[return to top of this report]
Switches are networking devices that can be used to link various network segments. The term generally refers to network
bridges that operate at Layer 2 and Layers 3-7 of the OSI reference model. Switches can operate at one or more OSI layers, including physical,
data link, network, or transport. Upper layer switches are commonly referred to as intelligent or multilayer switches.
The market continues to be dominated by Cisco. The data center is more competitive than the LAN or WAN
markets, opening it to smaller, niche vendors with specific products designed to
address this market. As switches are added to the network, network management
software becomes more complex and more necessary. All switch vendors market management software that adds additional revenue streams for the vendors.
Market Dynamics
[return to top of this report]
While the first switches on the market worked with telecom carrier networks, today the term refers to devices that link
networks of varying protocols, standards, media, and technologies. The first
Ethernet switch (that is, the first switch built to carry data) was introduced by
hardware vendor Kalpana (acquired by Cisco in 1994) nearly 30 years ago. Switch
technology has undergone myriad changes since then, including the move to
all-optical and all-IP-based networks, as well as convergence of data, voice, and video over a single network.
Commercial Use
In switches intended for commercial use, built-in or modular interfaces make it possible to connect to many different
types of networks. There are "seven layers" that are described in the
OSI model for networking – five of those layers pertain to switches, as detailed in Table 1.
| Layer | Description |
|---|---|
|
Layer 1 (Physical) |
A network hub, or repeater, is a network device – rapidly becoming obsolete – that does not manage any traffic, merely passes it to the next destination. |
|
Layer 2 (Data Link) |
Adequate for speed shifting, within one technology. |
|
Layer 3 (Network) |
For interconnecting technologies, such as Ethernet. If there are any features that characterize layer 3 switches, they are optimized, in larger switches, for high-density Ethernet connectivity. The most common layer 3 capability is awareness of IP multicast, through which a layer 3 switch can deliver the traffic of a multicast group to ports. |
|
Layer 4 (Transport) |
Traditionally offers capability for network address translation, then adds |
|
Layer 7 (Application) |
Distributes loads, based on uniform resource locators (URLs) or installation specific technique, to |
Configuration Options
Unmanaged Switches.
Unmanaged switches have no configuration interface or options and are simply
plug and play. They are typically the least expensive switches, found in homes,
small office home offices (SOHO), and small businesses.
Managed Switches.
Managed switches have one or more interfaces to modify the operation of the
switch. Common management methods include a serial console or command line
interface (CLI) accessed via telnet or secure shell; a SNMP protocol agent, for
managing from a remote console or station; or a Web interface, which uses a
browser. Managed switches include:
- Smart
(Intelligent) – Offer limited
management features. - Enterprise (Fully)
Managed – Include management
features, such as CLI, SNMP agent, and a Web interface.
They include additional features to manipulate configurations,
such as the ability to display, modify, backup, and restore configurations.
A stackable switch is an example of this type of switch.
Market Leaders
[return to top of this report]
Any discussion of the network switching market
begins with Cisco Systems. In Q4 2018, Cisco’s market share for Ethernet
switches was 57 percent, according to Synergy Research Group.1 It was
followed by
Huawei, Nokia, Juniper, Arista Networks, and Hewlett-Packard Enterprise (HPE).
Market Trends
[return to top of this report]
According to market research firm IDC,
Ethernet switching in the network is increasing steadily. The worldwide Ethernet switch market
(Layer 2/3) reached a record $7.8 billion in the fourth quarter of 2018
representing a year-over-year increase of 12.7 percent ($6.9 billion in Q4
2017). For 2018, the
Ethernet switch market took in $28.1 billion in revenues, with
year-over-year growth of 9.1 percent.2
10Gb Ethernet switch (Layer 2/3) shipments in Q4 2018 grew 14.6 percent from the same quarter a year
prior, although pricing is halting revenue increases. 100Gb Ethernet is soaring – reaching
3.8 million ports sold and gathering $1.1 billion in revenues
for Q4 2018. It now accounts for 13.6 percent of total market revenue, an 8.5
percent increase from Q4 2017.3
Fibre Channel over
Ethernet Switches
The FCoE switches, initially released in
2010, encapsulate Fiber Channel traffic over 10 GbE networks, extending existing
Fibre Channel traffic to a much higher speed networking technology. Deployment
of FCoE allows companies using FC in their storage area networks (SAN) to
leverage existing infrastructure while taking advantage of the higher seed 10
GbE network fabric. The main use of FCoE switches is in the data center to
consolidate network and storage traffic on a single network, while also
supporting dense server virtualization.
25 Gbps Channels for 40
GbE, 100 GbE, and Beyond
40 GbE has been ratified as a specification,
as has 100 GbE. The fastest single-lane connection for Ethernet is 10 Gbps.
Today, when a switch does 40 GbE, it’s a special cable that does four pairs of
fibers [that do 10 Gbps each]. Then there is the QSFP, which is a quad SFP
[connection]. So to get to 40 GbE today, it takes four lanes of [10 Gbps]
running together. 100 GbE is accomplished by taking 10 lanes of 10 Gbps.
The next actual bump in channel speed is 25 Gbps.
These are called "25/28 G" because they actually run at 28 Gbps. From an
Ethernet perspective, it will take four lanes of 25 Gbps instead of 10 lanes of
10 Gbps to get 100 GbE. It would be four times 25 Gbps. Therefore 10 lanes of 25
Gbps get 250 Gbps and 16 lanes of 25 Gbps get 400 Gbps.
Any speed above 100 Gbps is referred to Terabit Ethernet or TbE. Standards
were developed for 400 GbE and 200 GbE in 2017. The Ethernet Alliance continues
to test and advance Ethernet technologies. A recent test of 22 participating
companies demonstrated a 95 percent success rate in testing solutions ranging
from 50 GbE to 400 GbE.4
Strategic Planning Implications
[return to top of this report]
It is difficult to generalize what any
business needs or which switch will best fill those needs. For years, analysts
and consultants routinely recommended Cisco products for any networking
situation, except the SOHO deployment. There are more companies in the
switching market today but none approach the market share or breadth of product
line of Cisco. That said, there are some vendors that compete well with Cisco in
certain segments.
Multi-vendor approaches have become more
important as interoperability between vendors’ products is better than ever with
lower price points and fewer proprietary aspects than in the past, allowing for
deployment of another vendor’s gear even in a Cisco environment. In the data
center, Juniper is offering switches with 400 GbE capabilities. For high-density
deployments,
Arista provides competitive products and is even putting pressure on Cisco in
some areas. For the cloud, mobile, and Internet of Things environments, the
acquired line of Aruba Networks switches from HPE is a smart bet. Other vendors
also provide great options for environments from the data center to a campus.5
Huawei is also a powerhouse in the switch market although not as big as
Cisco. However, Huawei has come under great suspicion in the past couple of
years as US lawmakers see this company as a major security threat with potential
ties to the Chinese government. Backdoors have been hidden in certain Huawei
equipment and US government agencies are banned from using any of the company’s
products.
Web
Links
[return to top of this report]
Arista Networks:
https://www.arista.com/
Cisco Systems:
https://www.cisco.com/
Hewlett-Packard Enterprise:
https://www.hpe.com/
Huawei:
https://www.huawei.com/
Juniper Networks:
https://www.juniper.net/
Nokia: https://www.nokia.com/
References
[return to top of this report]
1 "Switch and Router Revenues Set a New Record; Cisco Market
Share Still Over 50%." Synergy Research Group. February 26, 2019.
2 "IDC’s Worldwide Quarterly Ethernet Switch and Router
Trackers Show Strong Growth in the Fourth Quarter and Full Year 2018." IDC. March
1, 2019.
3 Ibid.
4 "Latest Ethernet Alliance Plugfest Reaches New Heights of
Success." Ethernet Alliance. February 26, 2019.
5 Jeffrey Burt. "Top Data Center Network Switching
Companies." eWeek. February 13, 2019.
[return to top of this
report]