Crehan Research has recently generated a new report on the data center switch market showing that the data center Ethernet switch revenues exceeded $2 billion in fourth quarter 2012 (4Q12), putting this market on an $8 billion annual run-rate. 

Furthermore, the latest report shows that calendar 2012 revenue growth far exceeded that of 2011, driven by the adoption of 10 Gigabit Ethernet (GbE) switches. The leveling out in the decline of Chassis/Modular Ethernet switch shipments also helped in driving growth in the year 2012, according to Crehan Research.

In a statement, Seamus Crehan, president of Crehan Research said, “Given that data center Ethernet chassis or modular switches command a considerable price premium over the market average, mix shifts in this segment can have a significant market impact. Aided by stabilization in the mix of this data center Ethernet switch category, total market average selling prices fell only a little in 2012.”

Additionally, the report shows that the data center Ethernet fixed/top-of-rack switches continue to reach record levels, as this form-factor not only sees increasing server access deployment, but also data center aggregation deployments. In line with the overall market, Fibre channel switches also enjoyed revenue growth in 4Q12 and 2012, as higher pricing offset port-shipment declines.

Driven by increasing bandwidth demands and unique data center switching requirements to handle changing architectures and traffic requirements, continued growth and investment in data center switching is consistent with Crehan Research's long-term outlook.

The report forecasted that this market would approach $16 billion by 2017. It shows that Ethernet, including Fibre Channel-over-Ethernet, will become an ever-increasing portion of the overall market. Further, within the Ethernet segment, the research firm anticipates very strong growth for both 10GBASE-T and 40 GbE switches.