Dell’Oro: Mobile core network market growth slows

Dell’Oro Group trimmed its forecast for the mobile core network (MCN) market, citing slower subscriber growth. Worldwide MCN 5-year growth is now forecasted at a 1 percent compounded annual growth rate (CAGR), compared to our January 2023 forecast of 2 percent CAGR.

“We have reduced our forecast for the third consecutive time, primarily caused, this time, by an expected slowdown in subscriber growth,” said Dave Bolan, Research Director at Dell’Oro Group. “Also, we reduced our projections for the Multi-Access Edge Computing (MEC) market to a 31 percent CAGR as commercially viable enterprise applications are taking much longer to realize than earlier hoped.

“Mobile Network Operators (MNOs) are concerned about inflation, a possible recession, and political conflicts. They are therefore being restrained in their capital expenditures, another factor weighing in on a more conservative forecast. As we continue refining our count of MNOs that have launched 5G Standalone (5G SA) eMMB networks, we note that only 4 MNOs have commercially deployed new 5G SA networks compared to six in the first half of 2022,” Bolan added.

Additional highlights from the Mobile Core Network & Multi-Access Edge Computing 5-Year July 2023 Forecast Report:

* Year-over-year MCN revenue growth rates are projected to be flat in 2026 and turn negative in 2027.

* The North America and China regions are expected to have negative CAGRs, while Europe, Middle East, and Africa (EMEA), and Asia Pacific excluding China regions are expected to have the highest positive CAGRs.

https://www.delloro.com/news/slower-subscriber-growth-to-cut-mobile-core-network-market-growth/

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Dell'Oro: Data center physical infrastructure market up 10% in 2022

Data Center Physical Infrastructure (DCPI) market revenue growth accelerated in 4Q 2022, pushing full-year sales to 10 percent, according to a recent report from Dell'Oro Group. Growth was primarily caused by average selling price (ASP) increases as vendors passed on higher costs of raw materials, components, and logistics. ASP growth is forecast to continue in 2023, but easing supply chain constraints are expected to shift the primary growth driver to unit shipments.

“We’ve entered 2023 in unprecedented territory for the DCPI market. On one hand, DCPI vendors ended 2022 with historically high backlogs and easing supply chain constraints. On the other hand, normalizing order cycles and macroeconomic uncertainty are affecting the market’s trajectory,” said Lucas Beran, Research Director at Dell’Oro Group. “That means that vendors’ decision making and market positioning over the past 18 months will materially impact their performance in 2023, with market share shifts likely. DCPI vendors Schneider Electric, who currently holds the number one market share position, and Vertiv, who has the number two market share position, are prime examples of this. Based on their 4Q 2022 earnings releases, Schneider Electric is forecasting its revenue growth to slow, while Vertiv is forecasting its growth to accelerate,” added Beran.

Additional highlights from the 4Q 2022 Data Center Physical Infrastructure Quarterly Report:

• Vertiv, Schneider Electric, and Eaton were the three vendors who gained the most revenue share in 4Q 2022.
• North America and Asia Pacific (excluding China) were the fastest-growing regions in 2022, at double-digit growth rates. The Caribbean and Latin American (CALA), Europe, the Middle East and Africa (EMEA) and China all grew at single-digit rates.
• Product growth was broad-based, but rack power distribution and thermal management grew at the fastest rates to support increasing rack power densities.
• Worldwide DCPI revenue growth is forecast to maintain 10 percent in 2023, with higher backlog supported growth in the first half of the year, before growth marginally slows in the second half.

https://www.delloro.com/news/higher-asps-push-data-center-physical-infrastructure-market-up-10-percent-in-2022/

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Dell'Oro: Broadband equipment revenue up 17% in 2022

Total global revenue for the Broadband Access equipment market increased to $19 B in 2022, up 17 percent year-over-year (Y/Y), according to a new repor from Dell'Oro Group. Spending on PON equipment continues to fuel the overall market, with revenue for PON OLTs and ONTs reaching $11.7 B for the year.

"The focus on upgrading and expanding broadband access networks was a clear focus for operators around the world in 2022," said Jeff Heynen, Vice President with Dell'Oro Group. "We expect broadband to remain a critical area of investment in 2023, as operators expand their footprint and increase the speeds and services they offer subscribers," explained Heynen.

Additional highlights from the 4Q 2022 Broadband Access and Home Networking quarterly report:

• Total XGS-PON OLT port shipments exceeded 2 M for the year, reaching a total of 2.3 M worldwide.
• Total cable access concentrator revenue was up 1 percent Y/Y at $1 B. Remote PHY devices, Remote OLTs, and Virtual CMTS platforms all recorded significant revenue gains for the year, as cable operators continue to expand their DAA and fiber initiatives.

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Dell'Oro: Ethernet adapter market rose 40% in 2022

The Ethernet Adapter market grew 40 percent in 2022. However, we expect the market to moderate in 2023, as server vendors lower their inventory levels in anticipation of lower enterprise demand, and the major cloud service providers undergo a capex digestion cycle, according to a new report from Dell'Oro Group.

“The Ethernet Adapter market achieved record revenue growth in 2022, primarily from the shift of product mix to higher speed ports and higher prices,” said Baron Fung, Research Director at Dell’Oro Group. “However, the market is changing rapidly, as the market shifted from a supply-constrained environment to one that is oversupplied with vendors reducing inventory levels. Enterprise demand is expected to slow this year, and we anticipate some major cloud service providers will undergo a server digestion cycle. However, there are opportunities in the market, as server access speeds continue to increase, and broader Smart NIC adoption is expected in 2023,” added Fung.

Additional highlights from the 4Q 2022 Ethernet Adapter and Smart NIC report include:

• The Ethernet Adapter market is forecast for 13 percent revenue growth in 2023.
• 100 Gbps and higher speed ports could account for nearly half the market in 2023.
• Smart NIC open vendors such as AMD, Intel, and NVIDIA in a position to capture opportunities in the Cloud and Enterprise markets this year.

https://www.delloro.com/news/ethernet-adapter-market-grew-40-percent-in-2022/

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Dell'Oro: Wireless LAN revenues defy ongoing supply problems in Q3

 The Wireless LAN market hit a new record of $2.4 Billion in the third quarter, despite the continuing supply bottlenecks and representing a surprising 32 percent year over year growth, according to a recently published report from Dell'Oro Group. Meanwhile, manufacturers still have a huge pile-up of backlogged orders.

“The third quarter saw the second highest level of shipment volumes in history – a testament to manufacturers’ excellent navigation of the supply constraints,” said Siân Morgan, Wireless LAN Research Director at Dell’Oro Group. “Their strategies of redesigning products, expediting components, and turning to brokerage firms are coming to fruition. On top of this, the high adoption of Wi-Fi 6 is driving up prices, having an accelerating effect on revenues.

“We predict that the fourth quarter will be another record, with prices rising for the 6th quarter in a row, and shipment volumes skyrocketing. We’re also making the bold prediction that next year the Enterprise Class Wireless LAN market will break the $10 Billion mark,  two years earlier than we predicted,” added Morgan.

Additional highlights from the 3Q 2022 Wireless LAN Quarterly Report:

• Wi-Fi 6E volumes are still lagging the adoption rate of the three prior Wi-Fi technologies, while the new 6 GHz ecosystem develops and the industry plans for the arrival of Wi-Fi 7.
• A shift is underway in China, with Huawei ramping up its Wireless LAN shipments and seeing a drop in unit prices as the company expands to new market segments.
• Of the major manufacturers based outside China, HPE Aruba and Ubiquiti represented the largest portion – over 75 percent – of unit shipment growth.
• Arista and Ruijie Networks, two companies each with a small Wireless LAN market share, made bold moves focusing on expansion.
• Public Cloud managed APs are growing faster than the market and represented 30 percent of Wireless LAN revenues.

https://www.delloro.com/news/record-level-3q-2022-wireless-lan-revenues-defy-ongoing-supply-problems/

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Dell'Oro: Enterprise spend to remain vigorous in 2023

The ongoing need to modernize the network and security architecture for branch offices and hybrid users led to the vigorous 33 percent revenue growth in the SASE market, according to a recent report from Dell'Oro Group, which also anticipates that enterprises will continue to place a high priority on SASE and cause the overall SASE market to grow to $8 B for the full year 2023.

“3Q 2022 was the seventh consecutive quarter of year-over-year SASE revenue growth topping 25 percent, which signals the importance enterprises are placing on SASE,” said Mauricio Sanchez, Research Director, Network Security, and SASE & SD-WAN at Dell’Oro Group. “Unlike some other network security markets we track, we expect the high investment priority will continue and lead to the SASE market eclipsing $8 B in 2023,” added Sanchez.

Additional highlights from the 3Q 2022 SASE & SD-WAN Quarterly Report:

SASE security, also referred to as SSE (the basket of products providing cloud-delivered SWG, CASB, ZTNA, and FWaaS), achieved its tenth consecutive quarter of sequential revenue expansion.

SASE networking, synonymous with SD-WAN, had a challenging Y/Y comparison in 3Q 2022 against a very strong 3Q 2021 when enormous pent-up demand was a significant driver. Nonetheless, the ongoing trend of improved supply chains allowed vendors to better service demand and sustain a similar level of market growth compared to recent quarters.'

https://www.delloro.com/news/strong-enterprise-demand-drives-sase-growth-33-percent-in-3q-2022/

 

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Dell'Oro: Cloud Deceleration Expected in 2023

Hyperscale data center capex is on track for 28 percent growth 2022, according to a new report from Dell'Oro Group, owever, cloud service providers are expected to enter a digestion cycle in 2023.

“Data center capex has grown double-digits for the fifth consecutive quarter, led by the US hyperscalers’ investments in new data center footprints,” said Baron Fung, Research Director at Dell’Oro Group. “With supply improvements in the recent quarter, vendors were able to reduce backlog significantly in the rest of cloud and enterprise markets. However, we anticipate growth headwinds ahead, as the hyperscalers wind down on their expansion cycle, and enterprises tighten IT capital spending in light of an uncertain business climate,” explained Fung.

Additional highlights from the 3Q 2022 Data Center IT Capex Quarterly Report:

• China cloud and enterprise data center markets are undergoing deep spending cuts.
• Upcoming server architectural changes will drive long-term data center investments.
• Data center capex growth is projected to grow single digits in 2023.

https://www.delloro.com/news/hyperscale-data-center-capex-on-track-for-28-percent-growth-in-2022/

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Dell'Oro: Campus switch sales hit record high in 3Q 20

Worldwide campus switch sales were up 23 percent year-over-year (Y/Y) in 3Q 2022, the highest growth rate in nearly two decades, surpassing even the rate of recovery after the two prior market downturns in 2008 and 2020, according to Dell'Oro Group. Growth was broad-based across most vendors, including large and small players, but Cisco was the only vendor with meaningful share gain, increasing by nearly five points during the quarter.

“Gradually improving supply situation is helping release aging backlog, which sent port shipments to record levels for the quarter and for the first nine months of the year,” said Sameh Boujelbene, Vice President at Dell’Oro Group. “ Unfortunately, most of the backlog fulfilled during the quarter is from orders placed ahead of the list price increase. Consequently, vendors’ margins continue to be suppressed as cost continues to rise without being passed on to customers. As a point of reference, the cost of some constrained components went up by factors of 100 to 500.

“With such a strong performance for the first nine months of the year, the market is on track to achieve strong double-digit growth in 2022. Although 2022 is coming above expectations, we have not changed our forecast for 2023 and still predict a low-single-digit growth in the market. This growth will be fueled by near-record backlog levels reported by most manufacturers. Nevertheless, as the 2023 year progresses and backlog starts to normalize, macro-economic headwinds may start to suppress market performance,” added Boujelbene.

Additional highlights from the 3Q 2022 Ethernet Switch – Campus Report:

• As supply remains tight, market share shifts are and will remain subject to wild quarterly variations that may not be necessarily reflective of competitive displacements, but rather the timing of shipments.
• Huawei retained the leading revenue position in China, for the second consecutive quarter after being displaced by H3C in 1Q 2022.
• 5/5.0 Gbps ports were up more than 40 percent Y/Y, marking the second consecutive quarter of strong double-digit growth. What was interesting this quarter was that growth was diversified across various vendors, unlike prior quarters when Cisco used to drive more than two-thirds of the shipments in this segment.

https://www.delloro.com/news/easing-supply-chain-catapulted-campus-switch-sales-to-new-record-high-in-3q-2022/

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Dell'Oro: Total PON equipment revenue up 27% Y/Y

Total global revenue for the Broadband Access equipment market increased to $4.7 B in 3Q 2022, up 17 percent year-over-year (Y/Y), according to a new report from Dell'Oro Group. Spending on PON equipment continues to fuel the overall market, with revenue for PON OLTs breaking last quarter’s record of $1.3 B in the quarter.

“Thanks to a robust competitive environment and ongoing subsidization efforts, investments in new fiber broadband networks and equipment continue to grow,” said Jeff Heynen, Vice President with Dell’Oro Group. “It will be interesting to see if this momentum and resilience will carry into the fourth quarter and 2023, given the macroeconomic headwinds,” explained Heynen.

Additional highlights from the 3Q 2022 Broadband Access and Home Networking quarterly report:

• Total XGS-PON ONT unit shipments exceeded 1 M for the second straight quarter, reaching 1.5 M worldwide.
• Total cable access concentrator revenue was flat Y/Y at $259 M. Remote PHY devices and remote OLTs both reached record levels in the quarter, as cable operators continue to expand their DAA and fiber initiatives.
• Total cable CPE units increased 5 percent Y/Y, as vendors were once again able to fulfill orders that had been backlogged for multiple quarters. Total revenue was up 9 percent Y/Y as higher-end DOCSIS 3.1 gateways are the percentage of total unit shipments.

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Dell'Oro: Double-Digit growth in N America’s Service Provider router market

Growth in North America and the Caribbean and Latin America (CALA) regions continued accelerating in 3Q 2022 leading the worldwide Service Provider (SP) Router and Aggregation Switch market 5 percent year-over-year growth, according to Dell'Oro Group.

“North America’s continued upward trend in 3Q22 was driven by SPs upgrading networks to gain the advantages of 400 Gbps technologies and expanding their networks to accommodate growing traffic. Demand for network capacity continues to increase, driven by 5G, IoT, pervasive video, and other technology trends,” said Ivaylo Peev, Senior Analyst at Dell’Oro Group. “From a worldwide perspective, solid revenue growth in the combined SP Edge Router and Aggregation Switch segment was partially offset by flat performance in the SP Core Router segment. The fast-growing adoption of Edge Router and line cards based on the newest ASICs, which support 400 Gbps connections and offer the highest available bandwidth, was the key reason for the Edge Router segment growth in 3Q 2022,” added Peev.

Additional highlights from Dell’Oro Group’s 3Q 2022 Service Provider Router and Switch Report:

• High (double-digit) revenue growth in North America and CALA was diminished by declines in Europe, Middle East and Africa (EMEA), and Asia Pacific (APAC).
• Market growth was strong in the SP Edge Router and Aggregation Switch segment, while the Core Router segment trended flat.
• Supply chain constraints eased somewhat in the quarter, improving access to components and enabling SP Router vendors to work through some of their order backlogs.
• Among the top five SP Router Suppliers, Cisco and Juniper recorded solid revenue growth, while Huawei and ZTE declined. Nokia had a strong quarter based on revenue reported in Euros (EUR), but the adverse exchange rate from EUR to U.S. dollars (USD) resulted in a revenue decline in USD.

https://www.delloro.com/news/high-demand-led-to-double-digit-growth-in-north-americas-service-provider-router-market-in-3q22/

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Dell'Oro: Ethernet adapter market tops $1B for 3rd consecutive quarter

The Ethernet controller and adapter market surpassed $1 billion for the third consecutive quarter, according to a recently published report by Dell’Oro Group. The shift of product mix to higher speed ports and rising prices drove recent revenue growth.

“The Ethernet controller and adapter market achieved strong double-digit growth year-over-year in 3Q 2022,” said Baron Fung, Research Director at Dell’Oro Group. “Vendors are able to command higher prices, which contributed to topline growth. Furthermore, the supply constraints that have limited shipments in the prior quarters have been improving. However, demand is starting to soften in some sectors, with the server vendors reducing inventory levels of certain products,” added Fung.

Additional highlights from the 3Q 2022 Ethernet Adapter and Smart NIC report include:

• The Ethernet controller and adapter market is on track for 43 percent revenue growth in 2022.
• Ethernet controller and adapter port shipments are expected to decline in 2023 as the market undergoes digestion.
• The Smart NIC market is poised for strong growth in 2023, with major vendors AMD, Intel, and NVIDIA in a position to capture opportunities in the Cloud and Enterprise markets.

https://www.delloro.com/news/ethernet-adapter-market-surpassed-1-b-for-the-third-consecutive-quarter/

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Dell'Oro: Open RAN beats expectations again in 3Q 2022

The Open RAN train continues to move forward and accelerate at a faster pace than expected, according to a recently published report from Dell’Oro Group. Preliminary findings suggest the regional drivers that shaped the Open RAN market in the first half of 2022 extended into the third quarter, propelling Open RAN revenues to more than double on a year-over-year basis.

“While commercial Open RAN revenues continue to surprise on the upside, the underlying message that we have communicated now for some time now has not changed and remains mixed,” said Stefan Pongratz, Vice President with the Dell’Oro Group. “Early adopters are embracing the movement towards more openness but at the same time, there is more uncertainty when it comes to the early majority operator and the implications for the broader RAN supplier landscape now with non-multi vendor deployments driving a significant portion of the year-to-date Open RAN market,” continued Pongratz.

Additional Open RAN highlights from the 3Q 2022 RAN report:

• Top 4 Open RAN revenue suppliers for the 1Q22-3Q22 period include Samsung, Fujitsu, NEC, and Mavenir.
• Trials are on the rise globally, however, North America and the Asia Pacific regions are still dominating the commercial revenue mix over the 1Q22-3Q22 period, accounting for more than 95 percent of the market.
• More than 80 percent of the year-to-date growth is driven by the North America region, supported by large scale non-Massive MIMO and Massive MIMO macro deployments.
• The rise of Open RAN has so far had a limited impact on the broader RAN (proprietary and Open RAN) market concentration. The data contained in the report suggest that the collective RAN share of the top 5 RAN suppliers (Huawei, Ericsson, Nokia, ZTE, and Samsung) declined by less than one percentage point between 2021 and 1Q22-3Q22.
• Short-term projections have been revised upward to reflect the higher baseline – Open RAN is now projected to account for 6 to 10 percent of the RAN market in 2023. Open RAN growth rates, however, are expected to decelerate next year, reflecting the likelihood that the sum of new brownfield deployments will be able to offset more challenging comparisons with the early adopters.

https://www.delloro.com/news/open-ran-beats-expectations-again-in-3q-2022/

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Dell'Oro: Mobile core market declines in 3Q 2022

The Mobile Core Networks (MCN) and Multi-access Edge Computing (MEC) market revenue growth declined year-over-year (Y/Y) once more in 3Q 2022, according to a recent report from Dell'Oro Group -- the second quarter in a row with negative Y/Y growth. Since last quarter, nine new Mobile Network Operators (MNOs) have launched 5G Standalone (5G SA) networks, but it was not enough to offset the decline in 4G MCN and IMS Core markets.

“The China region had a positive Y/Y growth rate for the quarter, but it was not enough to offset the decline in the rest of the market, with the global market declining Y/Y,” stated Dave Bolan, Research Director at Dell’Oro Group. “Even with nine new MNOs launching 5G SA eMBB networks since last quarter, it was not enough to propel the MCN market into positive Y/Y growth. Many of these new 5G SA networks recently launched were not country-wide, limiting the growth. In addition, the fall-off in 4G MCN and IMS Core market was more than anticipated.

“To date, we count 36 5G SA eMBB networks that have been commercially deployed. The nine new 5G SA eMBB networks that MNOs launched since last quarter include Bell (Canada), AT&T and Verizon (USA), stc Bahrain, Telekom (Germany), Optus (Australia), Claro, TIM, and Vivo (Brazil),” continued Bolan.

• Additional highlights:
• The top five global MCN vendors for the quarter were Huawei, Ericsson, ZTE, Nokia, and Cisco.
• The top five global 5G MCN vendors for the quarter were Huawei, ZTE, Ericsson, Nokia, and Mavenir.

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Dell'Oro: Optical transport market declined 6% in 3Q

Optical transport equipment revenue declined 6 percent year-over-year in the third quarter of 2022, according to a recently published report from Dell’Oro Group. Supply of components continued to weigh down the growth potential of the optical equipment market.

“The main culprit for this market revenue decline was the lack of component supply needed to make finished goods,” said Jimmy Yu, Vice President at Dell’Oro Group. “Optical vendors have a growing amount of backlog due to higher demand for DWDM equipment but are not able to deliver completed systems when they are short on one component or two. Another factor lowering the market revenue is the strengthening US dollar. Since the market revenue is based on US dollars, most sales in Europe and Asia are converted to fewer US dollars and reducing the reported market size,” added Yu.

Additional highlights from the 3Q 2022 Optical Transport Quarterly Report:

• The total WDM equipment market, comprising Long Haul and Metro systems, declined 5 percent year-over-year in the quarter. However, we estimate that on a constant currency basis, the market revenue grew 0 to 1 percent in the same time period.
• Among the regions in the report, North America remained slightly positive while Europe declined at the highest rate. Revenue from the European region declined due to a couple factors: 1) the lower conversion of euro currency to US dollar and 2) the declining demand caused by the Russia-Ukraine war.

https://www.delloro.com/news/optical-transport-market-declined-6-percent-in-3q-2022/

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Dell'Oro: RAN declines again in 3Q

Preliminary findings suggest the slower momentum that characterized the Radio Access Network (RAN) market in the first half of 2022 extended into the third quarter. according to Dell'Oro Group. The data in the 3Q 2022 report indicate that the overall 2G-5G RAN market, declined year-over-year for a second consecutive quarter.

“After four years of extraordinary growth that catapulted the RAN market to record levels in 2021, the RAN market is now entering a new phase,” said Stefan Pongratz,  Vice President at Dell’Oro Group. “Even with 5G still increasing at a healthy pace, comparisons are more challenging and the implication for the broader RAN market is that growth is decelerating. Still, one major difference between 4G and 5G is the fact there are now more frequency options for the operators to pursue, which helps to curb the decline in the post-peak rollout phase,” continued Pongratz.

Additional highlights from the 3Q 2022 RAN report:

• Top 5 global suppliers in the quarter include Huawei, Ericsson, Nokia, ZTE, and Samsung.
• Top 4 suppliers outside of China in the quarter include Ericsson, Nokia, Huawei, and Samsung.
• Nokia’s RAN revenue shares improved sequentially for a third consecutive quarter.
• Short-term RAN prospects have been revised downward to reflect weaker-than-expected developments in the first three quarters of 2022. Global RAN revenues are now projected to decline at a low-single-digit rate in 2023, underpinned by surging RAN investments in India and more challenging comparisons in China, Europe, and North America.

https://www.delloro.com/news/ran-declines-again/

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Dell'Oro: Global cable operators committed to virtualization

A new survey from Dell'Oro Group finds that 100 percent of respondents have either deployed or are planning to deploy some form of vCMTS architecture in their networks within the next 24 months. Of those planning to deploy within the next 13-24 months, 73 percent define vCMTS as a remote PHY device (RPD) connected to a software-based virtual CMTS running on a server, with 20 percent defining vCMTS as a remote MACPHY device (RMD).

The global survey, Mapping the Future of Cable Virtualization, details the current and future broadband network deployment plans of cable operators around the world. From January to March 2022 Dell’Oro Group conducted an online and telephone survey of 50 global cable operators that have broadband networks and provide residential broadband services.

Additional highlights from the survey report Mapping the Future of Cable Virtualization include:

• In a sign that DAA still remains in the early stages of deployment, 66 percent of respondents have deployed anywhere from 101-1000 DAA devices (either RPDs or RMDs) in their networks to date.
• Hub site consolidation, DOCSIS 3.1 high-split upgrades, and capping legacy CCAP platforms are the technical drivers leading the decision to migrate to a vCMTS platform.
• Improved subscriber experience and platform analytics are the primary business drivers behind the decision to migrate to a vCMTS platform.

“Virtualization and DAA provide clear benefits to cable operators, especially in highly-competitive environments where throughput, signal quality, and service uptime are critical differentiators,” noted Jeff Heynen, Vice President of Broadband Access and Home Networking market research at Dell’Oro Group. “Adoption of these beneficial technologies is growing significantly,” explained Heynen.

https://www.delloro.com/news/new-survey-finds-that-global-cable-operators-remain-highly-committed-to-virtualizing-their-broadband-networks/

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Dell'Oro: Fixed wireless access equipment market continues growth

Total Fixed Wireless Access (FWA) revenues, including both RAN equipment and CPE revenue, remain on track to advance 35 percent in 2022, driven largely by subscriber growth in North America, according to a new Fixed Wireless Access Infrastructure and CPE advanced research report from Dell'Oro Group.

“Fixed Wireless Access has become a key component to bridging the digital divide and connecting rural and underserved markets globally,” said Jeff Heynen, Vice President and analyst with the Dell’Oro Group. “What we are also seeing is that FWA can effectively compete with existing fixed broadband technologies, especially with the advent of 5G and other higher-throughput, non-3GPP technologies,” added Heynen.

Additional highlights from the Fixed Wireless Access Infrastructure and CPE Advanced Research Report:

• Global FWA revenues are projected to surpass $5 B by 2026, reflecting sustained investment and subscriber growth in both 3GPP- and non-3GPP-based network deployments.
• The North American market remains the most dynamic in terms of deployed FWA technology options, with CBRS and other sub-6GHz options growing alongside 5G NR and 60GHz options.
• Long-term subscriber growth is expected to occur in emerging markets in Southeast Asia and MEA, due to upgrades to existing LTE networks and a need to connect subscribers economically.
• The Satellite Broadband market will also be a key enabler of broadband connectivity in emerging markets, thanks to LEOS-based providers including Starlink, OneWeb, and Project Kuiper.

https://www.delloro.com/news/fixed-wireless-access-equipment-spend-to-exceed-25-b-over-the-next-five-years/

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Dell’Oro: Edge Data Center Forecast

The telecom server market opportunity is projected to reach $14 B by 2026 according to a new “Telecom Server” report from Dell’Oro Group. Edge data centers will account for most of the telecom server market growth.

“Data center IT and telecom network infrastructure have been converging in recent years. Service providers have been replacing dedicated devices with unique hardware architectures in the mobile core network with commercial off-the-shelf (COTS) hardware to virtualize various network functions,” said Baron Fung, Research Director at Dell’Oro Group. “Network function virtualization has the potential to reduce capex through the use of less expensive and commoditized COTS hardware, instead of dedicated or proprietary hardware for network services. Furthermore, a new class of latency-sensitive applications in the form of multi-access edge computing (MEC), and virtualization of the baseband functions in the radio access networks in the form of Open RAN, will pave the way for the explosive growth of a new class of servers located at the network edge,” explained Fung.

Additional highlights from the new Telecom Server market Advanced Research Report:

• Edge use cases for Broadband Access, MEC, and RAN— still in the nascent stage, are expected to exceed 50 percent CAGR in server revenue over our forecast horizon.
• Server form factors and vendor ecosystem will require further development prior to mainstream adoption.
• Select telecom workloads are likely to migrate to the public cloud.

https://www.delloro.com/news/edge-data-center-growth-will-push-telecom-server-market-to-14-b-by-2026/

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Dell'Oro: Data Center Physical Infrastructure spending up 9%

Data Center Physical Infrastructure (DCPI) revenues grew 9 percent year-over-year in 2Q 2022, driven by average selling price increases and marginal improvement in unit shipments, according to a report from Dell'Oro Group.  Supply chain constraints are expected to linger into 2023 but minor improvements are forecast to lead to increasing unit shipments, alongside continued price realization in 2H 2022. These factors have led the 2022 full-year outlook for data center physical infrastructure to be raised by nearly 2 percent year-over-year (Y/Y).

“The Data Center Physical Infrastructure market remained resilient in 2Q 2022, despite Russia’s invasion of Ukraine and COVID-related lockdowns in China resulting in global macroeconomic uncertainty,” said Lucas Beran, Principal Analyst at Dell’Oro Group. “Furthermore, the global trends of electrification and digitalization, inherently linked to sustainability, are solidifying themselves as major DCPI market drivers, both in the short and long term. Historically high DCPI vendor backlogs provide the market with a strong runway into 2023. However, growing macroeconomic uncertainty and waning price realization are expected to moderate DCPI growth in 2023, particularly in the enterprise market segment.”

Additional highlights from the 2Q 2022 Data Center Physical Infrastructure Quarterly Report:

• Eaton, Cyberpower, Huawei, and Schneider Electric gained revenue share in 2Q 2022.
• North America and Asia Pacific (excluding China) were the fastest growing regions, at double-digit growth rates, in 2Q 2022. China was the only region to decline Y/Y, due to COVID-related lockdowns.
• Product growth was broad-based, with shorter sale cycle products such as single-phase UPS and rPDU growing at double-digit rates, while longer sale cycle products such as three-phase UPS and cabinet power distribution grew at slightly lower rates.
• Worldwide DCPI revenue growth is forecast above 10 percent in 2022, driven by double-digit cloud and colocation service provider growth and mid-single-digit enterprise growth.

https://www.delloro.com/news/

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Dell’Oro: Hyperscalers increased data center CAPEX by 45% in Q2

The U.S. cloud hyperscalers — Amazon, Google, Meta, and Microsoft — increased data center capex by 45 percent in 2Q 2022, propelling global data center capex to new heights. However, demand pullback is anticipated among certain Chinese and Tier 3 US cloud service providers and select enterprise verticals, according to a newly published report from Dell’Oro Group.

 “Data center capex attained the highest growth in more than three years, driven by ongoing footprint expansion and adoption of accelerated computing by the US hyperscalers,” said Baron Fung, Research Director at Dell’Oro Group. “However, growth in other markets was mixed, as some enterprise customers are delaying their data center purchases due to mounting economic uncertainties, while others continue to contend with persistent supply challenges. Nevertheless, double-digit growth in server average selling prices from the transition to new server architectures and higher supply chain costs fueled topline growth for the quarter,” explained Fung.

 Additional highlights from the 2Q 2022 Data Center IT Capex Quarterly Report:

• Backlog and higher equipment pricing are projected to drive data center capex in the second half of 2022.
• The Top 4 US cloud service providers are scheduled to launch services in more than 30 new regions in 2022.
• Data center capex growth is expected to moderate in all segments in 2023.

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