Data center network equipment revenue up 8% to $11.2 bn in 2014

Data center network equipment revenue including data center Ethernet switches, ADCs and WAN optimization appliances (WOAs) increased 8 percent to $11.2 billion in 2014, said Infonetics Research, now part of IHS.

Long-term growth in the data center market is expected to slow down by 2019 due to the migration to software-defined networking (SDN) and the shift to the cloud.

In the fourth quarter of 2014, the data center Ethernet switch market rose 5 percent sequentially, affected positively by CSP and financial institution spending.

The data center research report noted that the ADC segment has grown consistently for the last 7 quarters.

Interest in optimizing the WAN via software-defined WAN (SD-WAN) is strong, but the WAN optimization segment has yet to return to long-term growth.

25GE ports will begin shipping in Q4 2015, representing a new 25 / 100GE architecture for data center fabrics targeted at large CSPs.

Data Center Network Equipment vendor market share

Bare metal switches, which decouple hardware from software and offer greater agility and cost savings over traditional data center switches, will make up just under a quarter of all data center ports shipped worldwide in 2019, up from 11 percent in 2014.

Up till now, bare metal switching has been attractive mainly to the large cloud service providers (CSPs) like Google and Amazon who provide their own switch software integrated into data center orchestration and management platforms.

“But with vendors such as Dell and HP jumping into the mix with branded bare metal switches, adoption of bare metal switching is going to accelerate as tier 2 CSPs and large enterprises endeavor to achieve the nimbleness demonstrated by Google,” said Cliff Grossner, directing analyst for data center, cloud and SDN at Infonetics Research, now part of IHS.

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