The worldwide Data Center Switch market revenue grew only one percent year-over-year (Y/Y) in 4Q 2019, according to a recent report by Dell'Oro Group. This is the slowest growth recorded in six years. Revenue from North America and Europe was down but, surprisingly, China grew at a strong double-digit Y/Y rate during the quarter.
“In line with our expectations, the Top 4 U.S. Cloud Service Providers (SPs) posted mixed performance. Google and Amazon’s strong growth was partially offset by weakness from Facebook and Microsoft,” said Sameh Boujelbene, Senior Director at Dell’Oro Group. “Additionally, ongoing macroeconomic uncertainties in North America and Europe continued to weigh on network spending from Tier 2/3 Cloud SPs and large enterprises. However, what’s intriguing this quarter is the growth witnessed in China despite macroeconomic headwinds in the region. We believe part of this growth could reflect inventory buildup as well as some government projects to stimulate the economy,” added Boujelbene.
Additional highlights from the Ethernet Switch – Data Center Quarterly Report:
- Market softness is expected to persist through 1H 2020.
- Macroeconomic headwinds are expected to deteriorate due to the potential impact from Coronavirus (COVID-19) on demand as well as supply.
- Arista, Cisco, Juniper, and Dell initiated early 400 Gbps shipments.
