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Gigabit Ethernet market grows up, attracts more vendors

The infant Gigabit Ethernet market is starting to expand, and major vendors are staking their claims to market leadership.

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Posted April 1, 1999
By

Datamation.com Staff

(Page 1 of 3)

Gigabit technology has had significant impact on both the Layer 2 and Layer 3 Ethernet switching sectors, says Cahners In-Stat's senior analyst Emmy Johnson. "In 1997 there were fewer than 10 vendors shipping Gigabit Ethernet switch ports. By year-end 1998 there were more than 20 vendors shipping Gigabit Ethernet."

1998 Gigabit Ethernet Layer 2 & Layer 3 switch port market shares

Total 1998 shipments: 265,500

Source: Cahners In-Stat Group

The overall LAN packet-switch market grew 117% in 1998 to 47.8 million ports with $10.2 billion in sales, according to a report from Cahners In-Stat, a division of Newton, Mass.-based Cahners Business Information. "This market for faster LANs is no longer made up primarily of newcomers and pioneers," Johnson says. While the Gigabit Ethernet segment currently represents a small percentage of the overall packet-switch market, port shipments increased 18-fold in 1998.

The leaders in the Gigabit market, according to Cahners In-Stat, are 3Com Corp., of Santa Clara, Calif., and Extreme Networks Inc., of Cupertino, Calif. In 1998, Extreme faced increased competition and lost over half of its market share--dropping from 38% in 1997 to 18% in 1998. This has pushed the vendor to the number one spot for port shipments in the L3 segment because all of Extreme's switches are L3 capable and thus reported as L3 switches.

3Com dominates in L2 port shipments with a 26% market share. Its strength in L2 has made 3Com the number one contender in the overall L2 and L3 Gigabit Ethernet market.

Nortel Networks Corp., of Brampton, Ont., is another strong player in this segment, with a 12% share of the market. Missing from the Gigabit Ethernet 1998 top-tier rankings was Cisco Systems, a late entry that finished the year in fifth place for port shipments with an 8% market share. In L2 and L3 Gigabit Ethernet sales, Extreme continues to lead with a 19% share. 3Com and Nortel Networks follow with 15% and 14% share, respectively. Three of the top six players did not ship Gigabit Ethernet ports in 1997, a phenomenon that illustrates the volatility of this market.

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The LAN packet switch market is still one of the hottest markets in the networking segment, posting a 117% growth in port shipments from 1997. This report highlights the leading vendors for port shipments and end-use sales in various switch segments. These segments include L2 and L3 combined, L2, and L3 for each of the following technologies: 10 Mbps Ethernet, Fast Ethernet, Gigabit Ethernet, Token Ring, and FDDI. The Ethernet and Fast Ethernet segments are further broken down into modular and fixed-configurations.