Cisco Switches off Competition
In the switching space, the growth was largely among the large enterprises and SMBs going in for a networked environment. The market was pegged at Rs 1,587 crore in 2005-06, making it the biggest category in the overall networking spectrum. The IT and BPO sectors along with manufacturing were the leading consumers.

SMBs went in for unmanaged layer 2 and 3 switches, while the large and mid-sized enterprises opted for layer 4-7 managed switches. Ethernet remained driven by its lower cost; whereas, both Metro Ethernet and ADSL drove the business last fiscal. The real push in terms of volumes started coming in with the greater roll out of Metro Ethernet networks. Large enterprises and service providers drove the demand for managed gigabit switches.

Bandwidth-intensive applications, such as data warehousing, with the growing importance of voice and video traffic on the enterprise network, fuelled further rollouts.  Gigabit and fast Ethernet switches showed low volumes but drew high value.

Importance of gigabit Ethernet continued to increase in the backbone networks, and at the server level. It was still early days for gigabit switches at the node level; however, the fast Ethernet switches became well-established with the end users. The 10/100Mbps ports were routinely bundled with the end-nodes. Despite high costs, managed gigabit Ethernet switches became economically compelling for the corporate networks, and managed layer 4-7 switches saw a lot of uptake in the market. Though their volumes were lower than the unmanaged layer 2 and 3 switches, their contribution to the revenue was sizeable. These were adopted by many SMBs who began using LAN switches. The market has been whirring with gigabit for some years now. But, in FY 2005-06, they became more relevant with the rising trend of storing data on networked drivers and SANs, and with the continuous increase of high-bandwidth applications in the organizations. Even the 100 gigabit Ethernet would be economically viable soon, especially for large networks.

Convergence in transport layer has been instrumental in higher consumption of the networking gear. This also enabled the organizations to integrate services and applications. Deployment of converged networks, especially VoIP and related applications are driving the market. Power-over-Ethernet is also on the upswing.

Cisco reigned supreme in switches too. Its market share at 71% was slightly lower than the share in the router space

A big deployment last year was in the education sector through the World Bank assisted Technical Education Quality Improvement Program (TEQUIP). This will lead large deployments worth around Rs 1,350 crore.

Cisco reigned supreme in switches too. Its market share at 71% was slightly lower than the share in the router space. While Juniper and Huawei were number 2 and 3 in routers, 3Com and Nortel took those slots in switches. Strong in the switching space but still lack- lustre in the overall networking market, 3Com recorded 12% growth.

Nortel saw the culmination of a few big deals, especially switching at the data centers. Recovering from its earlier negative growth, Nortel has been making a strong foothold again. It bagged many clients in the BPO space particularly. Apart from the Tasman Networks acquisition, it also entered into a MoU with Huawei Technologies to establish a JV for developing ultra broadband-access solutions. With the defense sector revamping its networks, a huge arena is opening up for the company. With its dedicated SMB portfolio and enterprise switching products, Nortel is geared up to take on the competition.

3Com and Nortel follow Cisco in the switching space, only if the revenues of Foundry and D-Link are considered separately. However, since Foundry functioned in India as a JV with D-Link, the combined revenues of the two would make it Cisco's biggest challenger in switches. Like in routers, the lesser-known Dax Networks also shot to fame in switches with its revenue growing by nearly 35% last year.

Rajneesh De, Minu Sirsalewala
rajneeshd@cybermedia.co.in, minuvs@cybermedia.co.in

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