Open Compute Project (OCP) Survey: 2018 non-Board OCP revenue hit $2.56B with YoY growth=120%
Since its inception, the Open Compute Project (OCP) has worked to drive innovation in and around the data center industry, bringing together thousands of engineers from nearly two hundred member organizations. The demands on the modern data center continue to expand with the growth of IoT, security and edge computing, as well as increasing energy consumption requirements.
IHS Markit interviewed OCP members, suppliers and service providers, as well as incorporated their own in-depth industry research to determine revenue by region and vertical worldwide, as well as update their forecast through 2022. In order to ascertain a more accurate assessment of true marketplace adoption, usage by OCP Board member companies Facebook, Goldman Sachs, Intel, Microsoft and Rackspace was excluded from this study.
Among the preliminary findings:
· 2017 actual non-board revenue was $1.16 billion, just shy of the original forecast of $1.18 billion
· 2018 non-board OCP revenue tops the 2017 forecast, reaching $2.56 billion, compared to a forecast of $1.84 billion, with year-over-year growth of 120%
· 2017 Non-Board OCP revenue actuals show increased market share, from .87% to .91%, while overall Market Value dropped from $137 billion to $127 billion
· 2022 non-board OCP revenue share is expected to climb to more than 5% by 2022, at $10.7 billion, with a CAGR of 56%
· Servers, Storage and Networking are the fastest projected growth categories, with PON a potential high-growth area. Markets are just forming for disaggregated cell tower equipment, but Telco spend is expected to surpass Hyperscalers by 2021.
· The Government sector actually passed financial institutions in non-board OCP spending in 2017, while automotive and manufacturing is expected to have the highest 5-year CAGR. Healthcare is in the early stages of OCP adoption.
· There were no large changes in the forecast for regional growth – America’s still dominate due to Hyperscalers and Financial, but also now driven by Telco.
· APAC will surpass EMEA by 2020 with a CAGR of 108%, compared to EMEA at 59%.
Furthermore, the drivers of adoption of OCP are growing more diverse – cost reduction and power efficiency are still the biggest reasons why, but the market is now realizing that feature flexibility and conformance to those specifications approved by OCP provide a measure of “comfort” to the market.
“We are pleased that the adoption momentum continues and accelerates, and we value the insight provided by the study regarding barriers, challenges and opportunities. We are committed to continued improvement in the entire ecosystem to support the future growth.” stated Rocky Bullock, CEO for the Open Compute Project Foundation.
“The market ecosystem for OCP-certified equipment continues to mature, with more diversity for increased choice and an expanded supply chain allowing more tier-two CSPs, telcos and enterprise consumers to participate. A notable difference from last year’s study was the shift from direct factory purchasing to suppliers with local support, as additional market segments increased adoption,” said Cliff Grossner, Ph.D., executive director research and analysis, cloud and data center research practice at IHS Markit, a global business information provider. “OCP equipment market drivers such as serviceability, disaggregation and the flexibility to add new features took on a greater importance this year, which typically happens when a market matures and more mainstream buyers deploy.”
OCP and IHS Markit will release the full results of the research at the Annual OCP Global Summit, to be held in San Jose Convention Center in San Jose, CA March 14 – 15, 2019. This will include an Executive Track at 1:00 PM Pacific on Day 1 featuring the details of the findings to be presented by Cliff Grossner, and Vlad Galabov, Principle Analyst for Data Center Compute at IHS Markit.
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Edgecore Networks, Delta, Cumulus Networks (OEMs harware from ODMs in Taiwan), and HPE are the leading OCP network switch hardware makers for large data centers and carrier/service provider Central Offices. Stordis(Germany- https://www.stordis.com/) announced two bare metal switchesat 2019 OCP Summit:
Listing of OCP Network Switch products:
From Business Insider:
The Open Compute Project (OCP) was founded by Facebook several years ago to create faster, cheaper, designs for data center hardware that are free for anyone to use. It has become a wildly popular project, and now includes Microsoft, Google, Apple, Goldman Sachs and other big companies.
A new report commissioned by OCP (see details in blog post above) says that its hardware, excluding that bought by its board members like Facebook and Microsoft, has become a $2.5 billion market, and will grow to $10 billion in three years.
The Open Compute Project began its life at Facebook as a revolutionary idea to do for data center hardware what Linux and open source software did for the software market. In other words, the OCP comes up with cutting-edge, super-efficient designs that any company can use to build their own hardware. And the OCP has succeeded, by most reasonable metrics. The project has created a fanatical following among data center engineers, and has led to the creation of products in 10 categories, including networking, servers, and storage.
In terms of dollars and cents: On Thursday, the preliminary results of a new market assessment report commissioned by OCP was released. That report finds that companies spent more than $2.5 billion on OCP-designed products in, up from $1.16 billion year the before. Further, this report doesn’t actually reveal the true amount being spent on OCP gear.
It deliberately hides what the project’s board member companies are spending on their OCP equipment, which includes Facebook, Goldman Sachs, Intel, Microsoft and Rackspace. Those companies run enormous data centers and buy a lot of data center equipment, meaning the real figure is likely higher.
The reason the board members are excluded is to try and show that the project is having an impact beyond the handful of companies in leadership roles — although it’s a bit coy of the organization to keep mum on how much money those companies pour into the ecosystem. Even so, the commissioned report makes a fair case that OCP is creating a multi-billion market.
Excluding the purchases of board members, OCP products account for nearly 1% of the total data center market, which it pegs at $127 billion, the report says. Interestingly, the report also finds that the overall data center equipment market is shrinking, from $137 billion in 2017 to $127 billion in 2018. Companies across the board are reducing their use of private data centers, as their use of the cloud increases. And OCP includes many of the big cloud providers that are taking those workloads, including Microsoft, Google and Rackspace.
Simply put, that means that OCP has been eating the data center market in a measurable way. OCP’s goal is to take the power out of the hands of traditional server and networking vendors like Hewlett Packard Enterprise, Dell, or Cisco, and put it into the hands of the companies who buy and use that hardware.
While all three of those companies have joined the project, OCP members design their own servers, storage, and networking gear, making them cost less and perform faster than traditional commercial alternatives. Then, they share their designs for free. Anyone can modify those designs for their own use, or share them with the group.
Engineers love it. They get to freely collaborate with other top engineers trying to solve the same problems without worrying about protecting intellectual property or trade secrets. Contract manufactures (mostly from Taiwan) are available to build the gear, too, to make it easier for even smaller companies to take advantage of OCP gear.
OCP has also become such a big thing that a growing list of vendors, including HPE and Dell, also make commercial products that match OCP specifications. So OCP-designed products can be bought off-the-shelf. They don’t have to be custom-ordered, lowering the bar to entry.
With a loyal following of data center engineers, OCP and Facebook have moved on to a related industry: telecom equipment. Through OCP, telecom providers like AT&T and Deutsche Telekom are working on open source designs for routers and the other equipment that run their networks. This is gear that would challenge networking giants including Cisco and Juniper.
A few years ago, Facebook also launched a telecom-specific organization called the Telecom Infra Project. It is working on projects like open source telecom radio transmitters. This is gear that would take on the likes of Ericsson, Nokia and Huawei at this especially critical time, when telcos are upgrading their networks to 5G. Meanwhile, the telecom industry has also decided that it wanted to lead its own open-source hardware project, away from Facebook.
A project called the O-RAN Alliance has gained steam, and includes a who’s who of the major telecom companies worldwide. This includes AT&T, T-Mobile, Verizon, Sprint, SoftBank, SK Telecom, Telefónica, and others.
The industry scuttlebutt is that the two groups, TIP and O-RAN, are going to announce some sort of collaboration next week at Mobile World Congress so they don’t duplicate efforts as they work to to upend the global telecom equipment industry.
OCP’s market research report (by IHS Markit) doesn’t shed much light on how much money the telcos might shift to these new open source creations. But it does show that telecom companies are one of the major users of OCP gear — including servers, storage and OCP’s optical networking equipment.
Meanwhile AT&T has taken open source even further. It’s leading a project called Airship to share software that it’s building to run and manage its 5G network. This software can be used for lots of other data center needs at all sorts of other companies.
–>The radical idea that launched OCP is turning into a full-fledged hardware industry coup.
IHS Markit 2019 Market Impact Assessment: https://www.youtube.com/watch?v=e9111zvjJ-c
From IHS Markit’s OCP Summit 2019 presentation:
Actual (1Q–3Q18) revenue:
• 2018 OCP Non-Board YoY growth 120%
• 2018 OCP Non-Board revenue: $2.56B
Non-Board OCP revenue expected to top $10B in 2022
• Servers then storage, followed by networking top categories for revenue
• Growth rate of OCP Non-Board revenue in high double digits out to 2021
• Total market growing in low single digits
Video of IHS Markit 2019 OCP Market Impact Assessment: https://www.youtube.com/watch?v=e9111zvjJ-c
• PON potential high growth area
• Market just forming for disaggregated cell tower equipment
• US still dominates other regions in OCP revenue through 2022
• Americas’ early domination due to Non-Board hyperscaler and financial adoption, now driven by telco, CAGR =42%
• APAC will surpass EMEA on strength of hyperscaler and Tier-2 CSP adoption, CAGR 108%
• EMEA growth driven by telco. CAGR=59%
• 400GE switching and optical components shipping in 2019
• As the market shifts to tier-2 CSPs and Telco, fully integrated racks are preferred
Source: IHS Markit © 2018 IHS Markit
Video of IHS Markit 2019 OCP Market Impact Assessment:
IHS Markit 2019 OCP Market Assessment:
Telco Cloud: the next wave is rolling out
• Non-Board hyperscaler projects stalled in 2018, but tier-2 CSPs now ready to drive growth
• Telcos 2017 POCs moved to limited production in 2018 expecting ramp in 2019+, especially in Europe
• Telco total OCP spend will surpass Non-Board hyperscalers in 2021
• Top segments for 2022 are Telco, Tier-2 CSP and Enterprise
-Cost reduction and power efficiency remain biggest drivers for OCP
-Lack of local vendor support is to top concern over last year (60% of respondents)
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