Data Center Network Equipment
IHS Markit: On-premises Enterprise Data Center (DC) is alive and flourishing!
by Cliff Grossner, PhD, IHS Markit
Editor’s Note: Cliff and his IHS Markit team interviewed IT decision-makers in 151 North American organizations that operate data centers (DCs) and have at least 101 employees.
………………………………………………………………………………………………………………………………………………….
Summary:
While enterprise have been adopting cloud services for a number of years now, they are also continuing to make significant investments in their on-premises data center infrastructure. We are seeing a continuation of the enterprise DC growth phase signaled by last year’s respondents and confirmed by respondents to this study. Enterprises are transforming their on-premises DC to a cloud architecture, making the enterprise DC a first-class citizen as enterprises build their multi-clouds.
The on-premises DC is evolving with server diversity set to increase, the DC network moving to higher speeds, and increased software defined storage with solid state drive (SSD) adoption, according to the Data Center Strategies and Leadership North American Enterprise Survey
“Application architectures are evolving with the increased adoption of software containers and micro-services coupled with a Dev/Ops culture of rapid and frequent software builds. In addition, we see new technologies such as artificial intelligence (AI) and machine learning (ML) incorporated into applications. These applications consume network bandwidth in a very dynamic and unpredictable manner and make new demands on servers for increased parallel computation,” said Cliff Grossner Ph.D., senior research director and advisor for cloud and data center at IHS Markit (Nasdaq: INFO), a world leader in critical information, analytics and solutions.
“New software technologies are driving more diverse compute architectures. An example is the development of multi-tenant servers (VMs and software containers), which is requiring new features in CPU silicon to support these technologies. AI and ML have given rise to a market for specialized processors capable of high degrees of parallelism (such as GPGPUs and the Tensor Processing Unit from Google). We can only expect this trend to continue and new compute architectures emerging in response,” said Grossner.
More Data Center Strategies Highlights
· Respondents expect a greater than 2x increase in the average number of physical servers in their DCs by 2019.
· Top DC investment drivers are security and application performance (75% of respondents) and scalability (71%).
· 9% of servers are expected to be 1-socket by 2019, up from 3% now.
· 73% of servers are expected to be running hypervisors or containers by 2019, up from 70% now.
· Top DC fabric features are high speed (68% of respondents), automated VM movement (62%), and support for network virtualization protocols (62%).
· 53% of respondents intend to increase investment in software defined storage, 52% in NAS, and 42% in SSD.
· 30% of respondents indicated they are running general purpose IT applications, 22% are running productivity applications such as Microsoft Office, and 18% are running collaboration tools such as email, SharePoint, and unified communications in their data centers.
· Cisco, Dell, HPE, Juniper, and Huawei were identified as the top 5 DC Ethernet switch vendors by respondents ranking the top 3 vendors in each of 8 selection criteria.
Data Center Network Research Synopsis:
The IHS Markit Data Center Networks Intelligence Service 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], (4) FC SAN switches by type [chassis, fixed], and (5) FC SAN HBAs.
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.
IHS-Markit: Data Center Ethernet switch revenue reached $2.8B in 1Q2018
by Devon Adams and Cliff Grosner, PhD, IHS Markit
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 1st 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.
IHS Markit: Data Center and enterprise LAN SDN market totaled $4.4 Billion in 2017
Data Center & Enterprise SDN Hardware and Software Market Tracker from IHS Markit:
Highlights:
- Global data center and enterprise LAN software-defined networking (SDN) market revenue—including SDN-in-use bare metal and branded Ethernet switches and SDN controllers—is anticipated to reach $15.8 billion by 2022.
- Bare metal switch revenue came to $790 million in 2017, representing 26 percent of total in-use SDN-capable Ethernet switch revenue.
- Data center SDN controller revenue totaled $1.2 billion in 2017, and is expected to hit $4 billion by 2022, when it will represent 17 percent of data center and enterprise LAN SDN revenue.
- Cisco is number-one with 21 percent of 2017 in-use SDN revenue, VMware comes in at number-two with 19 percent, Arista at number-three with 15 percent, White Box at number-four with 12 percent and Huawei at number-five with 7 percent.
Notes:
- White Box is No. 1 in bare metal switch revenue, VMware leads the SDN controller market segment, Dell owns 44 percent of branded bare metal switch revenue in the second half of 2017, and HPE has the largest share of total SDN-capable (in-use and not-in-use) branded Ethernet switch ports.
- White box also ranked No. 1 in data center server revenue, pulling in 21 percent of the market in the first quarter, or $3.8 billion. Dell EMC dropped to second place in revenue at 20 percent ($3.6 billion), followed by Hewlett Packard Enterprise (HPE) at 18 percent ($3.2 billion).
IHS Markit analysis:
The data center and enterprise LAN market is maturing. In-use SDN revenue totaled $4.4 billion worldwide in 2017, and is expected to hit $15.8 billion by 2022. Innovations continue, with bare metal switch vendors announcing 400GE switches with new programmable silicon that incorporates an on-chip ARM processor to support artificial intelligence (AI) and machine learning (ML) and allows data plane protocols to be modified without changing silicon. Also of note, Edgecore Networks (Taiwan) contributed its 440GE switch design to the Open Compute Project (OCP).
SDN controllers for the data center also continue to add functionality, with increased support for interconnecting multiple on-premises data centers, and with support for interoperation between cloud service provider (CSP) data centers and enterprises as they build multi-clouds. Other notable enhancements include features that support container networking and integration with container management software such as Kubernetes.
Data center and enterprise LAN SDN is now mainstream and the market is expected to grow.
“Not all the $15.8 billion in revenue in 2022 is new. SDN-capable Ethernet switch revenue is existing revenue, and a portion of SDN controller revenue is displaced from the Ethernet switch market due to reduced port ASPs,” said Cliff Grossner, Ph.D., senior research director, IHS Markit. “Some network operators will elect to use bare metal Ethernet switches when deploying SDNs and rely on SDN controllers for advanced control plane features,” Cliff added.
About the report
The IHS Markit Data Center & Enterprise SDN Hardware & Software Market Tracker provides market size, market share, forecasts, analysis and trends for SDN controllers; SDN-capable bare metal Ethernet switches and branded Ethernet switches; and SD-WAN appliances and control and management. Vendors tracked include Arista, Aryaka, Cisco, Citrix, CloudGenix, Dell EMC, Fatpipe, HPE, Huawei, InfoVista, Juniper, NEC, Riverbed, Silver Peak, Talari, VMware, White Box, ZTE and others.
IHS Markit: Data center network equipment revenue reached $13.7 billion in 2017
Data center network equipment revenue, including data center Ethernet switches, application delivery controllers (ADCs) and software-defined enterprise WAN (SD-WAN), totaled $13.7 billion in 2017, increasing 13 percent over the previous year.
In the short term, investment in physical infrastructure is still driving data center network equipment revenue growth. However, in 2018 and 2019 the effect of server virtualization will slow the market, with fewer — but higher capacity — servers reducing the need for data center Ethernet switch ports, along with the move to virtual ADCs.
“The adoption of lower-priced bare metal switches will cause revenue growth to slow,” said Clifford Grossner, Ph.D., senior research director and advisor, cloud and data center research practice, IHS Markit. “The ongoing shift to the cloud not only moves network equipment out of the enterprise data center, but also requires less equipment, as the cloud represents data center consolidation on a wide scale.”
Data center network equipment highlights
- Data center network equipment revenue was on the rise, year over year, in all regions: North America and Europe, Middle-East and Africa (EMEA) each increased 10 percent in 2017; Asia Pacific (APAC) was up 23 percent; and Caribbean and Latin America (CALA) rose 2 percent.
- 25GE and 100GE data center switching ports increased three-fold year over year.
- New 200/400GE developments are underway, and shipments expected to begin in 2019.
- Long-term growth in the data center network equipment market is expected to slow to 6 percent in 2022, as SD-WAN revenue growth slows due to the migration from the enterprise dater center to the cloud.
- SD-WAN revenue is anticipated to reach $3.6 billion by 2022; the next wave for SD-WAN includes increased analytics, with artificial intelligence (AI) and machine learning (ML) providing multi-cloud connectivity.
Revenue results from key segments
- Data center Ethernet switch revenue rose 13 percent over the previous year, reaching $11.4 billion in 2017.
- SD-WAN market revenue hit $444.1 million for the full-year 2017.
- Bare metal switch revenue was up 60 percent year over year in the fourth quarter of 2017.
- ADC revenue was down 5 percent year over year in 2017.
Research synopsis
The IHS Markit Data Center Networks Intelligence Service provides quarterly worldwide and regional market size, vendor market share, forecasts through 2022, analysis and trends for 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). The intelligence service also covers application delivery controllers by category (hardware-based appliances, virtual appliances), SD-WAN (appliances and control and management software), FC SAN switches by type (chassis, fixed) and FC SAN HBAs.
Vendors tracked include A10, ALE, Arista, Array Networks, Aryaka, Barracuda, Broadcom, Cavium, Cisco, Citrix, CloudGenix, Dell, F5, FatPipe, HPE, Huawei, InfoVista, Juniper, KEMP, Radware, Riverbed, Silver Peak, Talari, TELoIP, VMware, ZTE and others.