IDC Forecasts Strong Growth in the LAN Switching Market

FRAMINGHAM, MA – SEPTEMBER 14, 2000 — The LAN switching market is one of the few remaining bright spots in the enterprise hardware market. According to IDC, worldwide port shipments of LAN switches will increase from under 79,000 in 1999 to over 231,000 by 2004. During the same time, revenues will jump from $13.2 million to $28.7 million.

"The need for high-availability networks will be one of the biggest factors driving growth of LAN switches," said Katrina Dahlquist, senior analyst in IDC's Enterprise Networks research program. "Network managers interested in running efficient multiservice networks that prioritize traffic, optimize bandwidth, and guarantee application performance will begin to use more sophisticated features of LAN switching equipment."

Vendors hoping to increase their LAN switching revenues should look beyond the United States. According to IDC, the domestic market will grow slower than any other region of the world and well below the overall market's rate. Because of its low growth, the United States will go from accounting for 52% of worldwide LAN switching revenues in 1999 to 33% in 2004.

"Service providers that are in the business of simply providing Internet access are unlikely to survive over the next couple of years. Internet usage demands continue to skyrocket while pricing for access continues to decline," warned Lucinda Borovick, program manager for IDC's Data Center program.

In terms of technology, 10/100Mbps will account for the bulk of the market's port shipments and revenues. However, beginning in 2001, 10GbE will experience rapid growth.

"Fast ethernet will maintain a leadership market share position and will remain the dominant switching technology, but gigabit ethernet will gain momentum throughout the forecast," Dahlquist said.

"Gigabit ethernet will be implemented in early stages because users will want to stay ahead of the obsolescence pathway. But by 2004, gigabit will become ubiquitous technology as higher bandwidth demand and stressed network capacities increase," she added.

Information like the above can be found in IDC's new report Worldwide LAN Switch Market Forecast and Analysis, 2000-2004 (IDC #B22925). The report analyzes key market, industry, and technology trends that will impact the LAN switching market's development. Port shipment, end-user revenue, average sales value, and installed base forecasts are provided through 2004, segmented by technology and platform.

To purchase the report, contact Bruce Atlas at 1-800-343-4952 extension 4053 or batlas@idc.com.

About IDC

IDC delivers dependable, high-impact insights and advice on the future of ebusiness, the Internet, and technology to help organizations make sound business decisions. IDC forecasts worldwide markets and trends and analyzes business strategies, technologies, and vendors, using a combination of rigorous primary research and in-depth competitive analysis. IDC provides global research with local content through more than 600 analysts in 43 countries worldwide. IDC's customers comprise the world's leading IT suppliers, IT organizations, ebusiness companies, and the financial community. Additional information can be found at http://www.idc.com.

IDC is a division of IDG, the world's leading IT media, research and exposition company.

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