Research firms see rosy future for Ethernet market
By Phil Hochmuth
Network World Fusion, 02/06/02
The worldwide Ethernet switch market will begin to creep back this year from its 2001 slump and pick up steam next year as enterprises look to upgrade aging wiring-closet boxes, according to Dell'Oro Group.
A recent report from Dell'Oro estimates that the market for Ethernet switches will climb from $11.5 billion to $18.9 billion in 2006.
The growth will be linked to the fact that much of the equipment purchased in 1999 will be ready to be replaced beginning this year and into next year, the research firm says. This is in line with a standard three- to four-year technology upgrade cycle businesses tend to follow.
New technologies such as 10 Gigabit Ethernet, and the dropping price of Gigabit and Layer 3 switches, will also drive market growth.
This year will probably not mirror the $2.7 billion in growth the Ethernet switch market saw in 1999, however, since employment at U.S. businesses is not surging like it was three years ago and next-generation technologies such as 10 Gigabit are still expensive. Still, the market is expected to grow this year, as opposed to 2001, where worldwide Ethernet switch revenues shrank for the first time.
Other research from IDC supports Dell'Oro in part by predicting that prices for Ethernet products, both commodity and advanced, will come down over the next few years. According to one IDC study, the average per-port cost of all Layer 3 switches will drop by almost half between 2001 and 2006, while per-port costs for Gigabit are estimated to drop from $780 to under $200 over the same time period. And while the current price of $35,300 for a 10 Gigabit Ethernet port may be out of reach for most enterprises, IDC expects the technology to cost around $4,500 by 2006. |
