Cisco Led $10 Billion Switching and Router Market in Q2

Service provider demand sagged last quarter but that hardly put a dent in Cisco's domination of the market.

Despite a little bit of a slowdown on the service provider front, the worldwide switching and router market keeps minting fortunes for some technology companies.

The market generated over $10 billion in revenues during the second quarter (Q2) of 2016 and $41 billion over the past 12 months, a 1 percent gain on a rolling annualized basis, according to the latest figures from Synergy Research Group. And once again, a familiar networking equipment maker from San Jose claimed the top spot.

In total, Cisco closed the quarter with more than half of the switching and router market (53 percent). The company claimed 68 percent of the enterprise router and 40 percent of the service provider segments. Cisco was also responsible for nearly 60 percent of the growing enterprise Ethernet switch sales during Q2.

cisco, switching and router

"Cisco's switching and routing revenues in the quarter were just a tad on the soft side, thanks mainly to a drop off in service provider routers, but the facts are that the overall market remains both huge and relatively stable, and Cisco remains a totally dominant force," said John Dinsdale, chief analyst and research director at Synergy, in a research note sent to Datamation. "Other vendors are trying to chip away at Cisco's market position and SDN/NFV [software-defined networking/network function virtualization] remains a potentially disruptive market force, but right now it continues to be pretty much business as usual."

Earlier this month, Cisco reported fourth quarter (Q4) fiscal 2016 revenues of $12.6 billion, a 2 percent year-over-year increase, and $48.7 billion for the full year. Routing revenue in Q4 dipped 6 percent to $1.9 billion while switching revenue climbed 2 percent to $3.8 billion. Cisco also announced plans to trim its workforce by 5,000 workers, or 7 percent of the company's global headcount, as the company pursues new opportunities in markets for Internet of Things (IoT), cloud computing and next-generation data center technologies, said Cisco CEO Chuck Robbins.

In Cisco's massive shadow are rivals Huawei, Juniper, HPE and Nokia. Individually, they had market shares ranging between 5 percent and 9 percent.

Accounting for more than 40 percent of worldwide revenues, North America has the biggest appetite for enterprise networking gear, followed Europe, the Middle East and Africa (EMEA), Asia-Pacific (APAC) and Latin America. APAC is the fastest-growing region due to a surge in service provider spending that is benefiting Chinese electronics maker Huawei, said Synergy Research.

Pedro Hernandez is a contributing editor at Datamation. Follow him on Twitter @ecoINSITE.

Tags: Cisco, router, switching

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