The acquisition of 3Com had propelled HP into the number two spot in the Ethernet switch market, according to market research firm In-Stat. In addition, the market is constricting so a handful of vendors account for virtually all of the revenue.HP, which now has 20% market share, usurped D-Link's spot in the second quarter of 2010. The top four vendors (Cisco, HP, D-Link and Netgear) accounted for virtual all of the market's shipments. Their lofty positions underscore the consolidation that has been taking place in the networking sector. Recently, vendors have been trying to increase their size via acquisitions in order to compete in a market showing signs of maturity and consolidation.

Those signs were evident in the second quarter: port shipments grew 3.3% but revenue dipped by 2.0%. Only one market segment fixed 10G bps Ethernet had positive growth: shipments were up 21.1% and revenue increased 6.6%. Another plus was Power over Ethernet features are becoming more common: they are available on 18.3% of all port shipments.

The network market has been undergoing a dramatic restructuring in the last few years. With consolidation taking shape, small and medium businesses are concerned about thelr suppliers' long term viability. When making their next major purchase or upgrade, these companies would like to be sure that they are teaming with a vendor that will still be selling Ethernet gear in a few years.