By Mary Gabra, Manager, Market and Competitive Intelligence, HP Networking
If you’ve read my blogs before, you know that I like analyzing markets by looking at them in pie terms. Pies are my favorite dessert but cakes too can be used in my analogies. My favorite is strawberry shortcake, with the custard in the middle and whipped cream on top! Yum! Let’s look at the networking market cake and see how it was split in 2011.
All industry analysts have just published their reports on Q411 market share and the full 2011 year share. The enterprise networking market (Ethernet switching, routers and WLAN) totaled $26B globally, according to Dell’Oro Group. Ethernet switching is the largest piece of that market, accounting for over 75% of that number. It is a large cake with a few vendors fighting to get bigger slices. A few years ago, this cake was owned by one incumbent vendor, Cisco. Today, this picture has changed and other players are splitting gains from the incumbent’s losses, with HP fairing with the larger piece of that split.
Take a look at the market share figures below that compare HP and Cisco’s 2011 to 2010 performance.
L2/L3 Ethernet Switching- Revenue Share
Share Change Y/Y
Enterprise Routers - Revenue Share
Share Change Y/Y
Enterprise WLAN- Revenue Share
Share Change Y/Y
Source: Dell’Oro Group, Q411 market share reports. (share numbers are rounded up but decimals are reflected in share change.)
These numbers speak to themselves, with Cisco in the red, losing, and HP taking some of that loss.
HP continues to be the #2 vendor in overall networking. In Ethernet switching, HP has always been #2 and maintained that position. Over the year, Cisco lost 3% share, of which HP took the larger piece of it with ~2% share gain.
In enterprise routers, HP surpassed Juniper and earned the #2 rank both in revenue and units share. HP’s growth in enterprise routers has been phenomenal exhibiting an 81% revenue growth Y/Y and almost doubling its share. Cisco on the other hand has been losing ground, showing a steep decline of 4% Y/Y. Juniper has been the only contender in routers where it had the second place ranking for some time but HP now has surpassed it with over a point of share. Juniper stayed flattish in 2011 at the 5.6% share.
In enterprise WLAN, the story is a little different than in switching and routers. The WLAN space is crowded with many players. So, Cisco’s loss of share is evenly split among a number of vendors. HP is ranked #2 in units and #3 in revenue share. Cisco’s loss of 4.5% share Y/Y was taken by a number of vendors and HP took 0.5% of it.
I have to say 2011 was an interesting year for the 800-pound gorilla
For the first time, Cisco showed a downward move in digits in its switching and routing market share. Switching share was down to the 60s percent range after being in the 70s for many years and routers moved down for the first time to be in the 70s percent range after being in the 80s for many years. I think that change in share position proves that the landscape has definitely changed after being under the dominance of a single vendor for many years. Enterprises now have become more aware of the benefits of introducing multiple vendors in its network and getting away from the lock- in with a single vendor. If interested in seeing what Gartner analysts have been saying about it, I invite you to read my blog titled Multivendor or single-vendor for the network—what’s better for the enterprise? that references the Gartner research.
Strong contenders like HP and Juniper have been able to invade the incumbent’s turf and take some of its share. That cake is surely delicious and eating more of it is well worth it. Looking at a full year’s performance gives a better indication on what is taking place with the vendors versus just a quarterly view, which changes due to seasonality or vendors fiscal year end. Let’s watch how 2012 will turn out and see how that market will be split among vendors.
OK. I think I have gotten the point across here about what happened in 2011’s networking market share and who gained and who lost.
The fact is no matter what you slice—pies, cakes or pizza, the fact is Cisco has been losing share and HP is gaining a big part of that loss.
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