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The Indian switch market has changed with wide adoption of world-class IT networks across verticals. Large MNCs are setting up their data and DR centers in the country. The market continues to increase due to higher PC penetration and adoptions, boom in ITeS, call centers, and the BPO market. Adoption of metro Ethernet is also leading to growth. Switch makers have also made strong inroads into sectors like manufacturing, while the government is emerging as a big spenders on e-Governance projects as is the banking sector has seen huge intake of switches.

The market grew by 24.7% to Rs 1,980 crore during FY '06-07 up from Rs 1,587 crore in FY '05-06.

Cisco continues to be #1 with a market share of 73% (including the unmanaged switches market, a segment wherein it does not have a presence) in fiscal 2006-07, improving its market share as compared with previous fiscal's 71.8%. Revenue is up by 27% at Rs 1,447 crore during FY '06-07 as against Rs 1,139 crore during 2005-06. D-Link touched revenue of Rs 129 crore in FY '06-07 compared to Rs 117 crore during the previous fiscal, registering a growth of 10.3%. Nortel is another major player, which has improved performance in the market, with a turnover of Rs 126 crore during the last fiscal, up from Rs 101 crore in FY '05-06, a growth of 24.7%.

The market share of D-Link and Nortel was 6.5% and 6.4%, respectively. Dax grew by 26.3% at Rs 24 crore from Rs 19 crore. 3Com revenue is up by 19.7% at Rs 79 crore from Rs 66 crore in the previous fiscal. Enterasys touched a 13.3% revenue increase at Rs 17 crore as compared with Rs 15 crore during FY '05-06.

Others like HP Procurve, Accent Net Technologies, LinkQuest Telecom, Raychem RPG, etc contributed Rs 158 crore to the total switch market worth Rs 1,980 crore.

Major Contributors
Investments in the IT/ITeS space and outsourcing still continue to be the key growth drivers. In addition, FY '06-07 witnessed a lot of government and defense led IT infrastructure initiatives, and expansions by telecom service providers. Commercial mid-market was another large growth driver.

ITeS contributed a huge 24% to the growth; while BFSI and BPO sectors were among the large buyers of networking equipment. Competitive pressures in BFSI resulted in continued investments being made towards expansion of communications infrastructure.

Switching Trends
Technology additions have dominated market trends during the last fiscal. The key technology additions have been blades, which now form a part of the switching technology on security, IPS, IDS, wide area application systems, and on application oriented networking. Metro Ethernet switches, 10G, more security related features, quad gigabit switch, that enables the carrier Ethernet to connect over a WAN, Giga to desk, unified switches, unified communications, and IP surveillance are some of the latest technology additions.

The recent major trends in switching will be migration from 10/100 to Giga switches and also a lot of up gradations from unmanaged to managed switches. The access layer contains devices that allow workgroups and users to use services provided by the distribution and core layers. From an access layer point of view access speeds would triple and we would see a transition from 1 Gb to 100 Gb. The core layer is responsible for fast and reliable transportation of data across a network. The speeds here would move from 1 Gb to 10 Gb and, with 40 Gb in the offing.

With emerging services such as IPTV, there is an increasing trend of multilayer (L3/L4) Ethernet switches being deployed in the aggregation. Layer 2 switches are popular in last mile and in CPEs, continue to be widely deployed. Layer 3 switches are used more in value-added networks.

The Indian economy is growing multifold, and same is the case with IT infrastructures. India is almost in the same track as the US in terms of technology deployments. Even in the US, Giga switching and 10G at the backbone drive the switch market.