DC Ethernet switch revenue reached $2.8B in 1Q18; Programmable switch silicon gets key validation

In 1Q18, Data Center *DC” Ethernet switch revenue reached $2.8B, up 12% over 1Q17; bare metal and purpose-built switch revenues grew 35% and 15% YoY, respectively. Bare metal switches are now widely available from both traditional and white box vendors. Purpose-built switches embedded with data plane programmable silicon from Broadcom, Cavium, and Barefoot Networks continue to expand. Over the past 18 months Arista, the #2 DC switching vendor, has released several switches with programmable silicon from each of the 3 manufacturers mentioned above.

“Bare metal switch shipments continue their long-term growth as hyper-scale and tier 2 cloud service providers (CSPs), telcos adopting NFV, and large enterprises increase their deployments worldwide”, says Devan Adams, MBA, Senior Analyst, Cloud and Data Center Research Practice, IHS Markit.

 “A mix of bare metal and purpose-built switches using programmable silicon from a handful of chip vendors continues to displace traditional switches in the market,” he added.

By CY22, we expect 25GE data center Ethernet switch ports to represent 16% of DC ports shipped, up from 6% in CY17; and 100GE ports to reach 35% of DC switch ports shipped, up from 9% in CY17. Ethernet switch manufacturers continue to enhance their portfolios with new 25GE and 100GE models. Dell began shipping its 1^st 25GE branded bare metal switch at the end of CY17; Arista has released several switches, including four 100GE and a 25GE model, since February 2018; and Juniper has introduced numerous switches, including two 100GE and two 25GE models, since the start of 2018.

“We believe 25GE will have a noticeable negative effect on the growth of 10GE, as CSPs favor 25GE for server connectivity and 100GE at the access and core layer; as a result, 100GE top-of-rack (ToR) switches connecting to 25GE server ports and the availability of 100GE bare metal switches will continue to drive additional 100GE deployments” says Devan Adams.

More Data Center Network Market Highlights

·        25GE and 100GE data center switching port shipments see triple-digit growths year over year in 1Q18.

·        200/400GE deployments edge closer, shipments expected to begin in 2019.

·        F5 garnered 46% ADC market share in 1Q18 with revenue up 4% QoQ. Citrix had the #2 spot with 29% of revenue, and A10 (9%) rounded out the top 3 market share spots.

·        1Q18 ADC revenue declined 4% from 4Q17 to $453M and declined 4% over 1Q17

·        Virtual ADC appliances stood at 31% of 1Q18 ADC revenue

Data Center Network Equipment Report Synopsis

The IHS Markit Data Center Network Equipment market tracker is part of the Data Center Networks Intelligence Service and provides quarterly worldwide and regional market size, vendor market share, forecasts through 2022, analysis and trends for (1) data center Ethernet switches by category [purpose built, bare metal, blade and general purpose], port speed [1/10/25/40/50/100/200/400GE] and market segment [enterprise, telco and cloud service provider], (2) application delivery controllers by category [hardware-based appliance, virtual appliance], and (3) software-defined WAN (SD-WAN) [appliances and control and management software]. Vendors tracked include A10, ALE, Arista, Array Networks, Aryaka, Barracuda, Cisco, Citrix, CloudGenix, CradlePoint, Dell, F5, FatPipe, HPE, Huawei, Hughes, InfoVista, Juniper, KEMP, Nokia (Nuage), Radware, Riverbed, Silver Peak, Talari, TELoIP, VMware, ZTE and others.