LAN Switch Revenue Is Soaring - Dataquest
NewsBytes - November 19, 1998: 3:30 p.m. ET
SAN JOSE, CALIFORNIA, U.S.A. (NB) -- Research published
this morning by Dataquest, a division of the Gartner Group [NYSE:IT],
suggests that, despite the falling cost of hardware, revenues from
local area network (LAN) switches are going through the roof.
In research that could make PC vendors' jealous, Gartner says
that, during the third quarter of this year, revenues topped the $2.1
billion mark. The report notes, however, that, while the routers and
LAN switch markets are doing very nicely, the shared media hubs
marketplace is struggling.
Delving into the research, which is published as part of
Dataquest's Networking Worldwide program, the $2.1 billion
revenues for the third quarter were some 28.7 percent higher than for
the same period last year.
Breaking down the figures reveals that Fast Ethernet switches
accounted for the lion's share, $1.2 billion, of the $2.1 billion
market.
According to John Armstrong, a principal analyst for Dataquest,
this area of the market, also known as the layer 3 switch market, is
performing very strongly.
"Layer 3 switches have grown to account for $188 million of the
LAN switch market. Layer 3 switches are poised to be one of the
fastest growing segments in the coming quarters," he explained.
According to Dataquest, during the third quarter, the worldwide
router market grew 19.3 percent with revenue reaching $1.6 billion,
while shared media hubs revenue slipped to just $516 million in the
quarter -- down 44 percent on the same period last year.
Armstrong noted that demand for multigigabit routers is
continuing to increase, with the result that the networking industry
should look out for changes in the multigigabit router space as new
market entrants begin to ship products later this year.
"Shared media hub port shipments have declined as the lure of
higher- performance switching solutions becomes stronger," he
explained.
Further details of Dataquest's research in the networking
marketplace is available on the firm's Web site at
dataquest.com .
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