The data center Ethernet switch market is expected to exceed $11 billion in 2019, making up roughly 44% of the entire Ethernet switch market, according to Dell’Oro Group. Cloud providers such as Apple, Amazon, Google, Facebook, and Microsoft are entering an expansion and “mega-upgrade cycle” driven by increased demand for 25G server and 100G switch speeds to boost capacity and replace aging infrastructure.
The cloud and enterprise switch market are evolving differently, Dell’Oro notes. Cloud providers are continuing expansion of white box switching and migrating to 100G later this year. And as small/medium businesses move to the cloud, millions of small deals will be consolidated into a few large cloud deals addressable by only a handful of vendors, the firm predicts.
Larger enterprises are adopting multigigabit 2.5G and 5G for high-speed campus wireless LAN connectivity. Those port speeds are designed to support newer, higher speed access points, like 802.11ac Wave 2.
By the end of this decade, cloud will make up the larger of the two markets for Ethernet switching, Dell’Oro says.
There’s still a healthy appetite for 10G server network ports despite these trends. Ten gigabit server ports are expected to comprise 50% of total network ports by 2017, and then plateau and decline beginning in 2018, Dell’Oro says.
Near-term growth will be fueled by the enterprise, driven by 10G Base-T. Most of the growth in server shipments, however, will be driven by cloud providers. As they migrate to 25/50/100G in their servers and switches, 10G will peak by 2018, Dell’Oro predicts.
As 10G peaks, 25/50/100G will grow to about a quarter of total controller and adapter ports by 2018, three years from early shipments, Dell’Oro says.
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