The Layer 2-3 Ethernet switch market is forecast to approach $28 billion in 2016, with future growth driven primarily by sales of Ethernet switches optimized for larger data center deployments.
That would represent a compound annual growth rate of about 6 percent from 2010, according to figures from Dell'Oro Group. Dell'Oro expects fixed 10G Ethernet to comprise the majority of revenue in Ethernet switching by 2016 due to data center requirements for the higher-speed ports. At the same time, 100Mbps Fast Ethernet, once the cornerstone of enterprise campus backbones and wiring closets, is fading away.
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Fixed 10G ports are typically found in top-of-rack data center switches, perhaps the hottest growth segment of data center networking.
PERSPECTIVE: 10G Ethernet shakes net design to its core
The research firm also forecasts healthy growth in 40G Ethernet and 100G Ethernet, with the combined technologies expected to exceed $3 billion in revenue by 2016. The migration of servers from Gigabit Ethernet to 10G Ethernet LAN-on-Motherboard this year will propel growth in 2013 and 2014, with most large enterprises deploying blade, SFP+ and 10G Base-T connectivity in 2013, and small/medium businesses moving to 10G Ethernet in 2014.
Growth drivers in Ethernet switching in the second half of the decade will be 40G and 100G Ethernet as more 10G deployments require higher-speed aggregation and inter-switch links.
During the forecast period from 2011 to 2016, the average selling price (ASP) of a 10G Ethernet port will drop from $715 to $212, according to Dell'Oro. Meanwhile, Gigabit Ethernet ASPs will drop from $60 to $38, and 100Mbps Ethernet port ASPs will hit $8 from $13.
At the same time, 10G Ethernet ports shipped will almost quadruple, to 62.2 million from 8.5 million. Concurrently, Gigabit Ethernet ports will decrease to 10.9 million from 11.9 million, and 100M ports will plummet by 80 percent -- from 133.4 million in 2011 to 27 million in 2016, the firm predicts.
Read more about LAN and WAN in Network World's LAN & WAN section.
This story, "Say goodbye to Fast Ethernet" was originally published by Network World.