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Higher Speeds Drive Data Center Switch Market to Nearly Double-Digit CAGR, According to Dell’Oro Group
February 2022 by Dell’Oro Group
According to a recently published report by Dell’Oro Group, the trusted source for information about the telecommunications, networks, and data center IT industries, the Ethernet Switch Data Center market is forecast to grow at a nearly double-digit CAGR between 2021 and 2026. 400 Gbps, 800 Gbps, and 1600 Gbps speeds are forecast to drive more than 50 percent of the market revenues towards the end of our forecast horizon.
“In line with our expectations, the data center switch market has not only been resilient to the pandemic, but has actually benefited from it,” said Sameh Boujelbene, Senior Director at Dell’Oro Group. “As digital transformation initiatives have been accelerated by the pandemic, we are seeing strong growth in the Cloud and at the edge. Towards the end of our forecast horizon, we are predicting that Cloud Service Providers will drive more than 50 percent of the spending on data center switches and will propel the adoption of 400 Gbps, 800 Gbps, and 1600 Gbps speeds.
“It will be very interesting to see how the various data center switch speeds continue to bifurcate. We are not only seeing a divergence between the Cloud and the non-Cloud segments in terms of their roadmap of migration to higher speeds but we are also seeing a divergence amongst the hyperscalers. Currently, each hyperscaler is making a distinct choice in terms of switch chips, switch radix, and network topology. We expect this divergence to increase when they migrate to next-generation networks in order to accommodate the need for new workloads such as artificial intelligence and machine learning,” added Boujelbene.
Additional highlights from the Ethernet Switch – Data Center 5-Year Forecast Report:
The non-Cloud segment is at least two-speed upgrade cycles behind the Cloud segment.
The availability of higher speed optics and higher speed SerDes will continue to drive the adoption of higher switch port speeds ahead of Ethernet Standards.
Co-packaged optics will start to ramp towards the end of our forecast horizon, but pluggable optics will continue to dominate.
About the Report
The Dell’Oro Group Ethernet Switch – Data Center 5-Year Forecast Report provides a comprehensive overview of market trends and includes tables covering manufacturers’ revenue, port shipments, and average selling price forecasts for various technologies: Modular and Fixed by Port Speed; Fixed Managed and Unmanaged by Port Speed. We forecast the following port speeds: 1/10/25/40/50/100/200/400/800/1600 Gbps.
