Server upgrades coming

Driven by new Ethernet speeds and cloud services, market trackers predict churn

The availability of multiple new data-center Ethernet speeds will lead to a much stronger server networking upgrade cycle than seen over the past decade, according to Crehan Research. The firm expects that the impending arrival of 25 Gigabit Ethernet, 50G and 100G products, in combination with existing 10G and 40G products, will result in more than two-thirds of total server networking ports migrating to high-speed Ethernet within three years.

The different speeds will appeal to different market segments, Crehan says. For example, 25G is expected to see a strong initial ramp from deployments by cloud giants such as Google and Microsoft, an area of the market where 10G server networking is currently prevalent.

Ten gigabit Ethernet should see its biggest adoption in mainstream enterprises, as they upgrade Gigabit Ethernet server and server access infrastructure to 10GBASE-T. Forty gigabit Ethernet is starting to ramp significantly as currently the most attractively priced data center Ethernet speed. Networking bandwidth demands were so strong in some market verticals that these customers could not wait to evaluate impending 25G and 50G options, Crehan reports.

A minimum of eight port speeds are expected to co-exist for server access over the next five years, according to Dell’Oro Group says. The firm also says server unit shipments are expected to grow in the low single digits compounded annually from 2014 to 2019.

High-density servers, based on either Intel’s X86 or ARM processors will drive the majority of growth in unit shipments during the forecast period. An increase in the number of connected devices as well as the number of workloads processed by data centers will continue to drive demand for physical servers, but virtualization will dampen growth rates, Dell’Oro says.

Growth will also shift from enterprise/premises deployments to cloud as cloud economics -- server prices, resiliency, scalability, and product lifespan—along with enhancements in security accelerate adoption.

And this server adoption will be fueled by growing demand among enterprises for cloud WAN services to help decrease operational costs and management burden. The Rayno Report predicts WAN cloud services to be a $7.5 billion market by 2020 with $360 million in venture capital investment in over a dozen start-ups as a bedrock.

The cloud WAN services market includes cloud-based WAN optimization, IP VPN and security services, according to Rayno. These services, delivered by 17 incumbent and start-up companies, promise to virtualize existing enterprise WAN hardware platforms and functions, such as branch office routers, VPNs, WAN optimization and application delivery controllers.

The Rayno report on cloud WAN service can be found here. It costs $650 for a single user license.

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