Dell'Oro: Q2 surge in data center switch sales

Global data center switch sales grew in excess of 20 percent in 2Q 2022, reaching an all-time high for the quarter as well as for the first half of the year, according to a new report from Dell'Oro Group. The growth was broad-based across a number of vendors. However, only Arista and white box vendors were able to gain revenue share during the quarter.

“We have been forecasting a double-digit growth in the market; driven by ongoing strong customer demand, balanced by supply challenges,” said Sameh Boujelbene, Senior Research Director at Dell’Oro Group. “However, vendors’ ability to work through these supply challenges and deliver the level of shipment witnessed during the quarter beat our expectations, although it came at higher logistics and component costs. We expect supply constraints to persist through the remainder of the year and to continue to shape the market as well as vendors’ performance,” added Boujelbene.

Additional highlights from the 2Q 2022 Ethernet Switch – Data Center Report:

• Double-digit growth was recorded across all major customer segments: Cloud Service Providers (SPs), Telco SPs as well as Large Enterprises. Each one of these segments reached a record revenue level for the quarter and the first half of the year.
• The robust growth was broad-based across all regions, including China which has experienced several weeks of lockdown in multiple cities during the quarter.
• 200 Gbps and 400 Gbps approached 2 M ports and comprised more than 10 percent of the shipments and nearly 20 percent of the revenues during the quarter. As anticipated, this growth was driven by an accelerated adoption from large Cloud SPs as well as some deferred revenues that got recognized during the quarter.

https://www.delloro.com/news/staggering-2q-data-center-switch-sales-drive-market-to-record-levels-for-the-quarter-and-first-half-of-the-year/

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Dell'Oro: DWDM equipment market to surpass $17B by 2026

Demand for optical transport DWDM equipment is forecast to surpass $17 billion by 2026, according to a new report from Dell'Oro Group. Over the next five years, it is expected that DWDM long gaul system sales will grow at a faster pace than WDM Metro system sales. 

"Although there is a ton of market turbulence, we do not see demand for DWDM equipment letting up," said Jimmy Yu, Vice President at Dell'Oro Group. "In fact, the biggest issue is that demand seems to be growing faster than supply. Hence, even if a mild recession were to occur, we think the worst case scenario is that demand will align with supply sooner."

"Hence, we are projecting continuous growth for DWDM system revenues. The only difference over the next five years, compared to previous years, is that we are expecting more growth from DWDM Long Haul since IPoDWDM should lower the use of WDM Metro systems in data center interconnect," added Yu.

Additional highlights from the Optical Transport 5-Year July 2022 Forecast Report:

• DWDM Long Haul revenue is forecast to grow at a five-year compounded annual growth rate (CAGR) of 5 percent.
• WDM Metro revenue is forecast to grow at a five-year CAGR of 3 percent.
• Capacity shipments each year are projected to grow at an average annual rate of 30+ percent.
• Spectral efficiency is expected to improve at an average annual rate of 9 percent.

https://www.delloro.com/news/optical-transport-dwdm-equipment-market-to-surpass-17-billion-by-2026/

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Dell'Oro: Ramping demand for 400G by Service Providers

The worldwide Service Provider (SP) Router and Switch market trended flat in 1Q 2022, according to a new report from Dell'Oro Group. North America, followed by the Caribbean and Latin America (CALA) region, led the worldwide market with double-digit revenue growth.

“Strong demand for SP Routers in North America and the CALA region was driven by the ramping adoption of 400 Gbps technologies by Cloud SPs and capacity expansions by Telecom SPs,” said Ivaylo Peev, Senior Analyst at Dell’Oro Group. “As SPs continued increasing investments by working on a large number of use cases across a broad area of network segments.

“Following on the previous year’s developments, major projects in North America were concentrated in network expansions for Internet and cloud backbones, mobile transport, and broadband aggregation. We found that in the CALA region, the strong 1Q 2022 growth reflected investments by Telco SPs in Brazil and Mexico, where the expansion of mobile backhaul infrastructure is increasing,” added Peev.

Some highlights:

• Strong growth in the North America and CALA regions offset a flat revenue trend in Europe, Middle East, and Africa (EMEA) and a market decline in the Asia Pacific regions. China’s SP Router market grew slightly.
• Key US- and Europe-based vendors exited the Russia and Belarus markets, suspending all sales and services in response to the Russian invasion of Ukraine. These measures caused a negative short-term impact on revenue and weakened vendor performance in the EMEA region.
• Growth in the SP Core Router segment was offset by soft SP Edge Router segment performance and a decline in the SP Aggregation Switch segment.
• Cisco remained the top-ranked vendor by market share, followed by Huawei, Nokia, and Juniper Networks.

https://www.delloro.com/news/400g-drove-service-provider-router-growth-in-the-americas-in-1q-2022/

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Dell'Oro: Campus switch sales rise despite supply chain issues

Worldwide sales of campus switch sales rose 7% in 1Q 2022, with growth across North America, Europe, Middle East and Africa, and China, according to a new report from Dell'Oro Group. North America accounted for more than half of the sales increase during the quarter.

“Remarkably and despite ongoing supply challenges, 1Q 2022 marked the fourth consecutive quarter of high single-to-double-digit growth in the market,” said Sameh Boujelbene, Senior Director at Dell’Oro Group. “In the meantime, port shipments were flat, suggesting that Average Sales Prices (ASPs) were up during the quarter. This ASP increase is mostly due to a more favorable regional, product, and customer mix. Our interviews revealed that vendors are sometimes selling higher-end products based on availability. Additionally, manufacturers get to choose which products they would like to place on the production line and they are prioritizing the products with a higher margin, ” added Boujelbene.

Additional highlights from the 1Q 2022 Ethernet Switch – Campus Report:

• All of the growth in the 1Q 2022 sales was driven by the Enterprise segment, while sales to Small and Medium Businesses declined as it appears that vendors prioritized the larger accounts.
• Although supply challenges are causing vendors to raise their list prices, these pricing actions won’t start to significantly impact market results until later in the year due to elongated lead times.
• The vast majority of the vendors were able to grow their revenues. However, Arista, H3C, and Juniper grew the fastest and were able to gain more than half a point of share each.
• H3C once again displaced Huawei as the revenue leader in China.
• 2.5/5.0 Gbps ports were down during the quarter, mostly due to supply constraints.

https://www.delloro.com/news/higher-asps-drove-7-percent-growth-in-1q-2022-campus-switch-revenue/

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Dell'Oro: Data center switch sales up 16% in 1Q 2022

Global data center switch sales grew robustly in 1Q 2022, reaching the second-highest revenue ever captured in the market, just 2 percent below the record sales level achieved in the prior quarter. Arista, H3C, Juniper, Star-net Ruijie, and white box vendors captured most of the growth in the market, according to a recently published report from Dell’Oro Group. Arista grew the fastest and was able to gain more than two points of revenue share during the quarter.

“Despite ongoing supply challenges, the data center switch market continues to perform remarkably well across all major market segments: Cloud Service Providers (SPs), Telco SPs as well as Large Enterprises, with Cloud SPs contributing about 70 percent of the Y/Y increase in sales,” said Sameh Boujelbene, Senior Research Director at Dell’Oro Group. “What was also interesting during the quarter is that despite these supply issues which are impacting all components, all industries, all regions, and all manufacturers, some vendors were somehow able to outperform the market. We would like to note, however, that given elongated lead times that are now exceeding six months on several products,  sales and vendors’ performance reported in 1Q 2022 are a reflection of orders, and in some cases, competitive displacements that happened in the second half of last year,” added Boujelbene.

Additional highlights from the 1Q 2022 Ethernet Switch – Data Center Report:

• 25 Gbps, 100 Gbps, 200 Gbps, and 400 Gbps comprised nearly 70 percent of the shipments in 1Q 2022 and 80 percent of the revenues as the pandemic has been favoring the new speeds in terms of supply as well as demand.
• 400 Gbps shipments exceeded 800 K ports during the quarter, despite some deferred revenues at certain Cloud SPs. We expect the 400 Gbps ramp to continue to accelerate this year.

https://www.delloro.com/news/data-center-switch-sales-grew-16-percent-year-over-year-in-1q-2022-according-to-delloro-group/

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Dell'Oro: Mobile Core and MEC market rebounds

The total Mobile Core Network (MCN) and Multi-access Edge Computing (MEC) market revenues for 1Q 2022 rebounded to a positive year-over-year (Y/Y) growth rate after the decrease in 4Q 2021 which was the first decrease since 4Q 2017, according to a new report from Dell'Oro Group.

The MCN market growth was driven by an extremely high double-digit percentage Y/Y revenue growth rate in the 5G MCN market overcoming the Y/Y revenue declines in the 4G MCN and IMS Core markets. For the MCN market regionally, the China region had a high growth rate while the MCN market excluding China had a negative growth rate for the quarter.

“With the continued aggressive build-out of 5G Standalone (SA) networks in China, the China region in 1Q 2022 substantially increased its share of the 5G MCN market over last quarter,’ stated Dave Bolan, Research Director at Dell’Oro Group. “At the end of 1Q 2022, we have identified 25 Mobile Network Operators (MNOs) that have commercially launched 5G SA Mobile Broadband networks (MBB) with services available to consumers. The 5G Core vendors (in alphabetical order) include Cisco, Ericsson, Huawei, NEC, Nokia, Samsung, and ZTE. We have identified 150 MNOs with 5G Core contracts with the above vendors plus Mavenir. There are still more 5G Core contracts that vendors have acknowledged without revealing the associated MNOs.

“We see fewer 5G Core network launches slated for 2022 as compared to 2021 when 16 networks were launched. However, many are being readied for 2023 launches and we project mid-single-digit percentage Y/Y growth rates for the balance of 2022. One of the most anticipated and publicized 5G Core launches is Dish Wireless – the first to run 5G Core on the Public Cloud. The company is preparing to launch in many cities by mid-June 2022 to meet regulatory coverage requirements. In early May 2022, Dish had a soft launch in its first city, Las Vegas. Nokia is the primary 5G Core vendor.

“Multi-access Edge Computing deployed by MNOs has barely scratched the surface in spite of all the hype, except for the China region, which has deployed thousands of MEC nodes throughout their MNO networks, with a mix of Public MEC and Private MEC sites,” continued Bolan.

Additional highlights from the 1Q 2022 Mobile Core Network and Multi-Access Edge Computing Report:

• The top two vendors for the MCN, 4G MCN, and IMS Core markets were Huawei and Ericsson.
• The top two vendors for the 5G MCN market were Huawei and ZTE.
• Nokia and Ericsson had the highest Y/Y growth rates for the 5G MCN market coming from a low small base. However, Huawei had the highest dollar revenue gain, with a lower Y/Y growth rate coming from a larger base.

https://www.delloro.com/news/china-5g-deployments-drive-mobile-core-networks-to-growth-in-1q-2022/

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Dell’Oro: SASE to to hit double-digit billion-dollar revenue by 2025

SASE is expected to hit double-digit billion-dollar revenue by 2025, according to an updated report from Dell'Oro Group.

“As enterprises pivot towards becoming cloud-first and mobile-friendly, they are running into the structural deficiencies of the hub-and-spoke model and need alternatives,” said Mauricio Sanchez, Director at Dell’Oro Group. “The need for more agility, better scalability, and ubiquitous security has driven the vendor community to respond with the convergence of software-defined WAN (SD-WAN) and secure web gateway (SWG) solutions into a new architecture under the SASE umbrella. As a result, enterprises’ interest in SASE is skyrocketing.”

Additional highlights from the SASE advanced research report:

• The number of SASE technology vendors has grown from a handful to 35.
• Over the past year, communications service providers have rapidly embraced SASE due to many technology vendor choices, the ease and low risk of deployment, and new revenue potential.
• Two major SASE implementations types exist in the market, unified and disaggregated. Unified type consists of single-vendor, tightly integrated SASE platforms. Disaggregated type is a multi-vendor or multi-product implementation with less integration than unified. Unified type will grow faster than disaggregated, but not surpass it by total revenue through 2025.

https://www.delloro.com/news/shift-to-cloud-and-mobile-friendly-it-will-drive-sase-to-double-yearly-through-2025/

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Dell'Oro raises outlook for O-RAN

Dell'Oro Group's Open RAN radio and baseband projections have been revised upward – total cumulative Open RAN revenues are now projected to approach $10 B to $15 B between 2020 and 2025.

“The momentum with both commercial deployments and the broader Open RAN movement continued to improve during 1H21, bolstering the thesis that Open RAN is here to stay,” said Stefan Pongratz, Vice President and analyst with the Dell’Oro Group. “We are adjusting the forecast upward to reflect the higher baseline and the improved pipeline,” continued Pongratz.

Additional highlights from the Dell’Oro Group Open RAN Advanced Research Report:

• Open RAN revenues are expected to account for more than 10 percent of the overall RAN market by 2025, reflecting healthy traction in multiple regions with both basic and advanced radios.
• Open RAN Massive MIMO projections have been revised upward to reflect the improved competitive landscape and the improved market sentiment with upper mid-band Open RAN.
• The shift towards Virtualized RAN (V-RAN) is progressing at a slightly slower pace than Open RAN. Still, total V-RAN projections remain relatively unchanged, with V-RAN expected to approach $2 B to $3 B by 2025.

https://www.delloro.com/news/open-ran-forecast-revised-upward/

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Dell'Oro upgrades 2021 outlook for RAN market

Preliminary findings suggest the RAN market continued to operate at elevated levels in the second quarter, showing remarkable resilience in the face of various risks including the on-going pandemic, supply chain shortages, and export restrictions, according to a new report from Dell'Oro Group.

“The underlying long-term growth drivers have not changed and continue reflect the shift from 4G to 5G, new FWA and enterprise capex, and the transitions towards active antenna systems,” said Stefan Pongratz, Vice President and analyst with the Dell’Oro Group. “At the same time, a string of indicators suggest this output acceleration is still largely driven by the shift from 4G to 5G, which continued at a torrid pace in the quarter, even as LTE surprised on the upside,” continued Pongratz.

Additional highlights from the 2Q 2021 RAN report:

• RAN rankings did not change – Huawei and ZTE were the No.1 and No.2 suppliers in China while Ericsson and Nokia maintained their No.1 and No.2 positions outside of China.
• Revenue shares changed slightly – preliminary estimates suggest Ericsson and Samsung recorded revenue share gains outside of China, while Huawei and ZTE improved their positions in China.
• The RAN market remains on track for a fourth consecutive year of growth. The short-term outlook has been revised upward – total RAN is now projected to advance 10 percent to 15 percent in 2021.

https://www.delloro.com/news/2021-outlook-upgraded-for-ran-market/

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Dell'Oro: Sales of data center switches surged in Q1

Global Data Center Switch market revenue were up 14 percent year-over-year in 1Q21, the strongest growth rate recorded since 1Q18, according to a new report from Dell'Oro Group. Growth was healthy across all major customer segments (Cloud Service Providers, Telco Service Providers, and Large Enterprises) and all regions, except Latin America.

“In line with our predictions, the recovery in the data center switch market, which started in the second half of last year, continued to accelerate in 1Q21,” said Sameh Boujelbene, Senior Research Director at Dell’Oro Group. “Although this strong performance was in part due to an easy year-over-year comparison, it was more reflective of an improvement in the demand environment. Additionally, impact from supply chain challenges on revenue and pricing environment during the quarter was minimal but may become more pronounced in the remainder of the year,” added Boujelbene.

Additional highlights from the 1Q21 Ethernet Switch – Data Center Report:

• Major vendors with revenue share gain in the first quarter period are Arista, H3C, and Huawei.
• 25 Gbps, 100 Gbps, and 400 Gbps comprised more than 60 percent of the data center switch port shipments in 1Q21 as the pandemic has accelerated the adoption of new generation speeds and the decline of legacy speeds.

https://www.delloro.com/news/sales-of-data-center-switches-surged-in-the-first-quarter-of-2021/

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Dell'Oro: XGS-PON OLT spending takes off

Total global revenue for the Broadband Access equipment market increased to $3.3 B in 1Q 2021, up 18 percent year-over-year (Y/Y), according to Dell'Oro Group. Growth came from spending on PON OLT ports, particularly 10 Gbps PON technologies.

"The shift to 10 Gbps PON technologies is happening quickly and on a global basis," noted Jeff Heynen, Vice President, Broadband Access and Home Networking at Dell'Oro Group. "The only thing preventing further expansions are supply chain constraints and increased costs," explained Heynen.

• Additional highlights from the 1Q 2021 Broadband Access and Home Networking quarterly report:
• Total broadband access equipment revenue was down 6 percent from the record revenue of 4Q 2020.
• Total cable access concentrator revenue increased 15 percent Y/Y to $243 M. Though DOCSIS license purchases were down, new hardware purchases in the form of CCAP chassis, line cards, and DAA nodes and modules helped push revenue higher.
• Total DSL Access Concentrator revenue was down 30 percent Y/Y, driven by slower port shipments worldwide as more operators shift their spending to fiber.
• Total PON ONT revenue was down quarter over quarter, but unit shipments remained above 30 M globally for the second straight quarter.

https://www.delloro.com/news/continued-strong-fiber-investments-push-result-in-18-percent-y-y-growth-in-broadband-equipment-spending/

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Dell'Oro: Optical transport equipment market stagnant in Q1

 The Optical Transport equipment market came in roughly flat with the year ago quarter in 1Q 2021, according to a new report from Dell'Oro Group. The North American market was the main culprit for this stagnant growth rate, offsetting all of the year-over-year growth in the other regions.

"Although the North American region was down this quarter compared to last year, it did improve from last quarter," said Jimmy Yu, Vice President at Dell'Oro Group. "In fact, the growth quarter-over-quarter was really strong. It grew just a little over 15 percent, and we think this strength will carry forward through the remainder of the year," added Yu.

Highlights from the 1Q 2021 Quarterly Report:

• The top manufacturers by revenue share were Huawei, Ciena, ZTE, and Nokia. Among the top four, Nokia gained the most revenue share over the year ago quarter.
• Three vendors (Ciena, Huawei, and Infinera) are actively shipping 800 Gbps-capable coherent line cards. However, due to the company's early entry, Ciena holds the lion share of shipment volume.
• Communication service providers comprised 71 percent of WDM market revenue in the quarter.

The year-over-year revenue growth in each region was as follows:

Regions Growth Rate in 1Q 2021

• North America -15%
• Europe, Middle East and Africa 10%
• Asia Pacific 0%
• Caribbean and Latin America 15%

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Dell'Oro hires Cliff Grossner to cover Edge Computing and IT Equipment Silicon

Dell'Oro Group has appointed Dr. Cliff Grossner to the role of Vice President, Edge Computing and IT Equipment Silicon including coprocessors for AI and ML. His current research agenda also includes AI driven data center automation suites and adoption of open infrastructure including OCP certified designs.

Dr. Grossner has more than 25 years of telecommunications experience encompassing scientific research, market analysis, strategy, and product management. Prior to joining Dell'Oro Group, Dr. Grossner held management roles in Omdia, and IHS Markit, focused on cloud services, data center IT and physical infrastructure.  He frequently is an expert judge for industry and technology innovation awards and an invited speaker, and often quoted in technical publications. Dr. Grossner earned his Ph.D. at McGill University, and his MSC in Computer Science at Concordia University, winning national scholarships to support his graduate work. He holds over 10 patents in computer networking, network embedded security and telecommunications applications.

"Dr. Grossner adds significant fire-power and experience in the world of IT equipment, components, and the intelligence software running over it. The team is excited with the perspectives and wisdom a man of his caliber brings. He has an excellent track record of identifying emerging markets and developing theories on where they are headed. I am very pleased Dr. Grossner has joined us," Tam Dell'Oro, Founder and CEO said.

 "I am excited to join Dell'Oro Group to research IT ecosystems, innovation has never been higher, driven by digitization and consumer demands. Equipment markets are shifting due to new technology, new business models, and disruptive early stage companies. I look forward to being first to identify and quantify new trends, provide insight on markets changes, help with product and go to market strategies following the Dell'Oro tradition of providing timely, accurate, and insightful information," commented Grossner.

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Dell'Oro: Optical transport market slowed in 4Q2020

 Optical transport equipment revenue increased 1 percent in 2020 reaching $16 billion with growth in all regions with the exception of North America and Latin America, according to a new report from Dell'Oro Group.

“Between concerns on starting new optical builds during the start of the pandemic and aggressive plans on 5G deployments that required a larger share of a service provider’s capital budget, the spending on optical transport dramatically slowed by the end of 2020,” said Jimmy Yu, Vice President at Dell’Oro Group. “It was a really dramatic drop in optical equipment purchases in the fourth quarter. While we anticipated a slowdown near the end of the year due to concerns around COVID-19, we were surprised by a 29 percent year-over-year decline in WDM purchases in North America as well as a 12 percent decline in China. That said, there was good growth in the other parts of the world, especially Japan,” continued Yu.

https://www.delloro.com/news/optical-transport-equipment-market-grew-1-percent-in-2020-to-16-billion/

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Dell’Oro: Ericsson and Nokia gain in RAN market

Preliminary estimates suggest that the 2G-5G radio access network (RAN) market ended the year on a high note, with the full year 2020 revenues marking a new record since we started tracking the program in the year 2000, according to a newly published report from Dell'Oro Group.

Additional highlights from the 4Q 2020 RAN report:

• Initial estimates suggest that vendor rankings remained stable between 2019 and 2020, while revenue shares were impacted to some degree by the state of the 5G rollouts in China and North America.
• Ericsson and Nokia maintained their No. 1 and No. 2 RAN revenues rankings excluding China. Both suppliers improved their RAN revenue shares outside of China, accounting for 35 percent to 40 percent and 25 percent to 30 percent of the overall RAN market, respectively.
• Huawei maintained its No. 1 ranking for the global RAN market, reflecting share gains in China.

“While we correctly identified the overall trajectory of the market going into the year and maintained the positive outlook even as the pandemic intensified and economists adjusted their GDP projections sharply downward,” said Stefan Pongratz, Vice President and analyst with the Dell’Oro Group. “We also need to recognize that we completely underestimated the magnitude and the breadth of the ascent in the fourth quarter and for the full year 2020, reflecting stronger than expected results in multiple regions,” continued Pongratz.

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Dell'Oro: SASE market to grow at 116% CAGR

The emerging Secure Access Service Edge (SASE) market is expected to grow at a compounded annual growth rate of 116 percent over the next five years (2019-2024), according to a new report from Dell'Oro Group.  

SASE comprises the integration of SD-WAN, Secure Web Gateway, and Firewall technologies that brings networking and security into a unified, cloud-based service offering to increase the scalability, agility, and security of the network while reducing the total cost of ownership.

“SASE holds great appeal because it unifies and simplifies networking and security across a wide variety of network use cases, ranging from larger headquarter/branch networks down to individual users,” said Mauricio Sanchez, Research Director at Dell’Oro Group. “Over the next five years, we expect the initial thrust for SASE to come from small to medium enterprises, for whom unification and simplification rank high, but also expect larger enterprises to begin pivoting.” 

Additional highlights from the SASE 5-Year Forecast Advanced Research Report:

Compared to the hardware, the software will account for the vast majority of SASE revenue and is expected to continue increasing its contribution over the next five years.

The combination of software and hardware sold as physical appliances will account for the vast majority of SASE revenue in the near-term. However, in the long-term will switch to revenue from cloud-hosted Software-as-a-Service (SaaS).

https://www.delloro.com/advanced-research-report/secure-access-service-edge-sase/

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Dell'Oro: Worldwide data center CAPEX continues to grow

Data center capex, which includes capex for servers and other data center infrastructure equipment, is forecasted to grow at a 6% CAGR to just over $200 B over the next five years, according to Dell'Oro Group. Growth is forecasted to be mixed depending on the customer segment. The Cloud, which already accounts for more than 60% of the worldwide data center capex, will continue to gain momentum over Enterprise/On-premise data center deployments. Edge data centers deployed over Telco networks could emerge in the longer-term horizon.

Capex on servers, which generally accounts for nearly half of the data center capex, may be influenced by the following factors:

• Change in server unit demand from Cloud capacity and digestion cycles.
• Market volatility of commodity pricing of components such as memory.
• Server refresh cycles, which could prompt the replacement of aged servers and drive new deployments, could impact server architecture and pricing.
• Servers also drive the demand for auxiliary data center infrastructure equipment such as networking switches, storage systems, and facilities.

The COVID-19 pandemic is expected to profoundly disrupt global demand for data center infrastructure equipment in 2020. Impacted vertical industries, especially brick-and-mortar retail, travel, hospitality, and small and medium enterprises, have seen a pull-back in IT spending as they wait for the business climate to stabilize. As enterprises seek to conserve capital, Public Cloud, which offers a flexible and consumption-based infrastructure, could help meet the growing demands of remote work and distance learning. The COVID-19 pandemic and the ensuing recession may have the long-lasting effect of accelerating the permanent migration of certain industries and workloads to the Cloud.

Market and Technology Trends to Watch Out For

• The Top 4 U.S. Cloud service providers—Amazon, Facebook, Google, and Microsoft—are positioned to continue their momentum of expansion over the next five years. Servers will continue to be consolidated in fewer mega Cloud data centers that could potentially provide greater capacity than the same number of servers spread out across thousands of Enterprise data centers.
• The Top 4 U.S. Cloud service providers have been prolonging the useful life of servers in an effort to lower server depreciation expense while maintaining high efficiencies and reliability of their server fleet.
• The Intel server processor refresh cycles have historically influenced IT spending. While the major Cloud service providers typically ramp server capacity outside of the processor refresh cycle, the upcoming Intel 10 nm Whitley server platform refresh due later this year could generate an uplift on server spending. Viable alternatives to Intel processors, AMD EPYC and ARM, for server and storage system applications are starting to materialize in certain markets.
• Various open-source organizations have come together to share and standardize best practices in the design of efficient, scalable, and sustainable data center infrastructure. The Open Compute Project (OCP), in particular, has introduced various technological innovations in the areas of server and server connectivity, rack architecture, and networking switches, which could shape the future development of data center infrastructure.

https://www.delloro.com/news/worldwide-data-center-capex-to-grow-6-percent-cagr-by-2024-2/

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Dell’Oro: Mobile Core Network market grew 10% in Q1

The Mobile Core Network market grew 10 percent year-over-year to nearly $8 Billion for the trailing four quarters ending in 1Q20, according to a new report from Dell'Oro Group. Growth is expected to accelerate over the next four quarters due to 5G Core deployments.

“There are other factors influencing the uptake. The COVID-19 pandemic is now seen mostly as a positive for the wireless infrastructure sector with more demand for voice and data. Plus the T-Mobile/Sprint merger has completed, and the new T-Mobile is moving ahead with an aggressive 5G build,” Bolan continued.

Additional highlights from the Mobile Core Network 1Q20 report:

• Revenue market share for Huawei and Ericsson combined for over half of the market, while Nokia, ZTE, and Cisco totaled over 25 percent, for the trailing four quarters ending in 1Q20.
• We forecast the Network Function Virtualization penetration will approach 70 percent in 1Q21 due to the revenue growth in 5G Core deployments.

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Dell'Oro: Mobile Core Network market approaches $8 billion

The Mobile Core Network (MCN) market expanded for the second consecutive year and approached $8 billion in 2019, according to a new report from Dell'Oro Group. Ericsson, Huawei, and Nokia ranked as the top three vendors.

Some highlights from the Mobile Core Network 4Q 2019 report:

• The top six MCN vendors for 2019, in alphabetical order, were Cisco, Ericsson, Huawei, Mavenir, Nokia, and ZTE. These vendors accounted for over 85 percent of the worldwide MCN market revenue.
• The regional revenue rankings were: Asia Pacific; Europe, Middle East, and Africa; North America; and Caribbean and Latin America respectively.

“The MCN market is expected to continue to grow in 2020, but at a slower pace,” stated David Bolan, Senior Analyst, Dell’Oro Group. “Some of the contributing factors are an anticipated slow take-up of the 5G Core, slower growth in India due to service providers’ financial stress created by increased tax burdens, and the uncertainty in the European Union resulting from unresolved security concerns. The anticipated growth in 2020 will be to serve the increasing number of 4G and 5G subscribers and associated devices like wearables and tablets, the seemingly unquenchable thirst for data, and the growing use of Internet of Things (IoT) in LTE networks."

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Dell'Oro: Demand for 400G switch expected to grow this year

Ethernet Switch Data Center port shipments are forecast to surpass 60 million by 2024, with more than 50 percent of the port shipments will operate at 100 Gbps, 400 Gbps and 800 Gbps - according to a recent report from Dell'Oro Group.

“800 Gbps, 400 Gbps, as well as new waves of 100 Gbps will be enabled by faster SerDes technologies and higher speed optics,” said Sameh Boujelbene, Senior Director at Dell’Oro Group. “Optics will continue to play a vital role in the data center switch market. The availability of high volume, low-cost optics is crucial in driving any speed transition. Additionally, as network speed increases beyond 800 Gbps, pluggable optics will hit density and power issues. Hence it will become imminent for the industry to adopt alternative options such as Co-Packaged Optics (CPO). We expect such transition to bring major disruptions to the supply chain as it requires new business and serviceability models,” added Boujelbene.

Additional highlights from the Ethernet Switch – Data Center 5-Year Forecast Report:

• Demand for 400 Gbps from the broader market is expected to ramp by end 2020 and in early 2021.
• 400 Gbps and higher speeds are predicted to account for more than 25 percent of port shipments by 2024.

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