What's popping in three key market segments.
BY TIM GREENE, DAVID ROHDE AND JOHN COX
Network World, 4/24/00
Following exerpted from: nwfusion.com
Having traveled just about one-third of the way into 2000, we've encountered a couple of real surprises on the enterprise networking path. The strategic shifts we've seen major network vendors -- Cabletron, Lucent and 3Com -- take away from the enterprise market had been unexpected indeed. We knew some things needed to change, but this? Of course, the hot infrastructure technologies will carry on, but vendor choices are diminishing. [snip]
Second to VPNs, this will be the year that Gigabit Ethernet and Layer 3 switches march into the enterprise. "Gigabit Ethernet will finally live up to its billing in 2000," says Lauri Vickers, an analyst with Cahners In-Stat Group in Scottsdale, Ariz. In both areas, expect to see Extreme Networks emerge as a bigger player.
A key new driver this year will be Gigabit Ethernet over copper, which started shipping at the end of 1999. Gigabit Ethernet over copper is attractive because it runs over existing Category 5 wiring and it costs one-third less per port than Gigabit Ethernet over fiber.
In 1999, Cisco led the Gigabit Ethernet pack with 39% of market revenue, In-Stat says. 3Com came in at a distant second, with 13% of revenue. That latter figure includes revenue 3Com earned from the Extreme Networks switches it resold.
Of course, 3Com has left the race and, as part of its exit strategy, is referring CoreBuilder customers to Extreme.
While its unclear how much Extreme will benefit from that move, it's relatively certain that the vendor will at least get looked at by new enterprise prospects. In fact, all smaller players, including Alteon WebSystems and Foundry Networks, should fare well from the Gigabit Ethernet boom. When it comes to Layer 3 switching, Cisco will continue to pull in the most sales, followed by Cabletron and then Extreme, according to In-Stat. With Cabletron's recent four-way split, continued growth in enterprise networking now falls under the unproven Enterasys Networks banner.
"The best way I can think of describing it is as a well-positioned wild card," Vickers says.
Here too, Extreme is positioned to pick up customers reluctant to go with the Cabletron spin-off.
In all, vendors sold $1.8 billion in Gigabit Ethernet switches last year and will sell $4.3 billion this year, In-Stat projects. For Layer 3 switches, sales were $2.6 billion in 1999 and are projected to be $5.3 billion in 2000. Meanwhile, Layer 2 switches still account for 79% of LAN switch purchases, In-Stat says.
The upshot: The drive for speed in the enterprise as well as the expanded use of VPNs will be key sources of revenue growth for network vendors this year.
--Tim Greene
NOTE: There are some market size projection tables in the original article above-referenced URL. |
