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10 Gigabit Ethernet is the one bright spot

The Ethernet switch market is feeling the effects of the sagging economy in a record-setting way, with Dell'Oro Group forecasting the biggest first-quarter drop ever in Ethernet switch revenue. There is, however, one category of Ethernet switch bucking the trend.

Dell'Oro said last week that it expects the Ethernet switch market to decline more than 10% in the first quarter of 2009 and “to lose over $1 billion dollars in its quarterly run rate over the course of two quarters.” The decline comes after the fourth quarter of 2008 already saw a smaller drop.

Dell'Oro had already forecasted the market to fall almost 10% for this year, but later added the prediction about the record drop in revenues this quarter.

The group hastened to add that the first quarter of any given year is “typically seasonally weak.” But “deteriorating macroeconomic conditions have coincided with what is usually the market’s weakest quarter of the year, exacerbating the decline in the first quarter of this year,” the group said in a statement.

The one bright spot in all of this is 10 Gigabit Ethernet. It will be the only area within the larger Ethernet switch market to actually show growth in port and revenue shipments, according to Dell'Oro.

Perhaps we ought to focus on that good news. (One of our reporters here, Carolyn Duffy Marsan, has started up a Twitter feed that focuses on good news in tech, called “TechOptimist”.)

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