After a year of talk, it looks as if network managers are starting to trust the vendors and plonk down hard cash for wireless switches to control the airspace in their offices. Meanwhile, despite the hotspot hype, service providers are buying less wireless hardware than either businesses or consumers, according to figures from market researcher Infonetics Research.

Wireless switches – that sit in the wiring closet and manage wireless access points – only make up a tiny proportion of the overall market for wireless LAN equipment. But the figures, from market researchers Infonetics Research, show corporations starting to take control of their airspace.

Wireless LAN switches made $12 million in the third quarter of 2003, the first time enough have sold to register on Infonetics’ figures. “Port shipments grew 95 percent to 23,000 this quarter, and revenue grew 100 percent,” said Richard Webb, lead analyst of the Infonetics report. Infonetics predicts the sector will grow strongly, to an annual $169 million by 2006. The company found end users positive about the products: “There is a warm response to wireless LAN switches,” said Webb. “Management and other switch features are what is demanded by IT managers.”

Switches are the brightest point in an overall market that is growing, albeit not so explosively: from $658 million this quarter, total wireless LAN hardware only reaches $3.6 billion for the whole year in 2006, according to Infonetics’ reckoning. At that point, only 5 percent of the money will go on switches.

Is that enough to nourish the big group of enterprise Wi-Fi hopefuls? Despite talk of a shake-out, Webb thinks it might be: “I don’t see any of them necessarily falling by the wayside,” he said. “In the short term it’s a land grab, but it will grow to be big enough for quite a few of these switch guys. They have to talk about their differentiating features.”

In some cases, those differentiators are big enough to threaten to split the category. Webb hopes to include security gateways such as Bluesocket, Vernier and ReefEdge in future studies, though these have fewer wireless-specific features than the true switches such as Aruba, Airespace and Trapeze. “If they are happy to co-operate then we can find a working definition that includes them,” he said.

With that many companies around, however, the price per port on wireless LAN switches will fall rapidly, he said (Netgear’s forthcoming WLAN switch being a case in point).

With the wireless switch market still forming, Infonetics is cagey about leaders there, but puts Cisco – whose hostility to specialist wireless switches is well known -- well ahead in the whole WLAN market. The company has 14 percent of the market under its own name, and 13 percent through its Linksys subsidiary. However, since it has been selling products the longest, Webb is pretty sure that Symbol would be the market leader now.

Despite the hype about hotspots, they have not produced much business yet, with only 11 percent of the wireless LAN market, and this is growing slower in Europe, says Webb, in contradiction of rival researchers Insight, who think European coffee drinking will boost hotspot use here. “Hotspots are taking off much slower than people were expecting,” he said. “Europe has a cluster of powerful cellular providers, who are behind 3G (and behind with 3G). They are beyond the fear that Wi-Fi will compete with 3G, but they are still working out how to make part of a broader mobile data strategy.” There are more business issues to be resolved in Europe than in the US, he said, where the banner has been carried by specialised start-ups.