Cisco Still Rules Ethernet Switch, Enterprise Router Markets

Cisco Systems continues to dominate different router and switch segments, according to reports from market research firm Infonetics Research.

Layer 2 and layer 3 Ethernet switch port revenue increased 16 percent to $3.6 billion in the last quarter, while revenue for enterprise routers increased to $1 billion in the first quarter of 2004, the research firm said.

Ethernet switches experienced strong demand in the 1 gigabit category offsetting a decline in the 100 megabit class. said Neil Osipuk, Infonetics directing analyst.

Ethernet vendors are reporting a moderate increase in customer spending, Osipuk said. He expects spending on network infrastructure to accelerate through the entire year before it tapers off from 2005 to 2007.

"The increased enterprise spending is being driven by the need to replace aging pre-Y2K equipment and by a migration from a large installed base of 100 megabit switches to 1 gigabit and 10 gigabit speeds," Osipuk wrote in a statement.Although Cisco dominates in both 100 megabit and 1/10gigabit categories, it is feeling competitive heat from Hewlett-Packard, NETGEAR, and 3Com, Osipuk said.

Cisco leads the enterprise router market, too. In addition, Cisco's biggest competitor is itself -- its Linksys unit is second to Cisco in revenue and first in unit market share. The enterprise router market is up 8 percent to $1 billion in the first quarter and Osipuk projects its annual revenue will grow 13 percent between 2003 and 2007.