$19 Billion Spent on Enterprise Routers and Switches in 2005; Will Near $25B Mark in 2009

Infonetics : The worldwide layer 2 and layer 3 Ethernet switch market blew past the $15 billion mark in 2005, growing 9% from 2004 to $15.3 billion, and the layer 4 through 7 switch market grew 26% to reach $750 million. .

Together, worldwide L2–L3 Ethernet switches and L4–L7 switches are forecast to grow 27% between 2005 and 2009, topping $20.3 billion, with port shipments growing faster due to price declines, especially for faster speed switches.

Enterprise router revenue was up 6% for the quarter but down 3% for the year, from $3.4 billion to $3.3 billion between 2004 and 2005, due to price pressure. Despite the dip in revenue, enterprise router units grew 14% in 2005, indicating continued strong demand.

Annual router unit shipments are forecast to grow 41% between 2005 and 2009, passing the 2 million unit mark in 2007, with revenue growth close behind, growing 37% to $4.5 billion in 2009.

.As organizations continued to build out and upgrade their aging infrastructure, they spent more than $19 billion on enterprise routers and switches last year. .Overall, the market for enterprise networking gear remains healthy, with Ethernet switches doing particularly well.

• 273 million L2-L3 Ethernet switch ports were shipped worldwide in 2005, 20% more than the year before

• worldwide L2-L3 Ethernet switch revenue was up 4% for the quarter, to $4.1 billion, and ports were up 7%

• L2-L3 PoE port shipment growth picked up again, with ports up 16% in 4Q05

• worldwide L4–L7 switch revenue jumped 19% between 3Q05 and 4Q05 to $215 million, (28% higher than 4Q04), and unit shipments were up 14% to almost 13,000

• Asia Pacific’s share of L2–L3 Ethernet switch revenue is expected to grow from 20% in 2005 to 26% in 2009 at the expense of North America’s share, though in actual dollars, all markets are growing long term

Router Highlights

• worldwide secure router revenue jumped 121% between 2004 and 2005, from $363 million to over $803 million, and unit shipments nearly tripled

• In 2005, Cisco leads the enterprise router market by a wide margin, followed by Huawei and Nortel

L2–L7 LAN Switches Publ 20060221 Layer 2? Wikipedia ; Red Viking