The rising tide of pandemic-driven digitization has lifted all datacenter boats.
From the largest cloud service providers and hyperscalers down to small to mid-sized managed service companies, datacenter components spending has been significant with network gear reflecting serious, steady gains.
The switching market is booming, according to research firm Dell’Oro, which released analysis on the datacenter switching market this week, showing an exceptionally strong market with plenty of interest in forward-looking technologies, including 800Gbps speeds and sustained growth for the emerging 400Gbps market.
Sameh Boujelbene, senior research director at Dell’Oro group, tells The Register that this is especially noteworthy because growth, particularly for 400Gbps ports, which doubled in 2021 (although still only representing 10 per cent of the market) is robust across all the large datacenter markets they track, from CSPs, telcos, and large enterprises with “double-digit growth and record high sales for 2021”.
“People are very interested in new speeds and network refreshes. During the pandemic until now, we’ve been seeing the demand for these higher speeds reflected in bookings, not just revenues since those revenues are still behind,” Boujelbene tells us.
“All of this happened because of the increased pace of digital transformation, which created the need for a lot more bandwidth. The pandemic had a positive impact on demand and even supply, although from a different angle. Yes, we have all these supply chain constraints but vendors are stockpiling on newer tech to avoid the risk of obsolescence,” she adds.
Boujelbene explains that vendors aren’t stockpiling everything. For instance, despite its dominance now, don’t expect a run on 100Gbps but 400Gbps will be in style for a couple of years still to come and that has vendors snatching up all they can get, creating a hike for the overall market so they can keep their big CSPs and enterprises fed.
400Gbps is making a big shift out of hyperscale and CSPs into ordinary enterprises, so this stockpiling, especially given the uncertainties the market has already weathered, is not unwarranted, even if it does warp prognostication.
For the largest consumers of datacenter network gear, the biggest CSPs in the US and Meta/Google types that all go for white box options, all the way to enterprises that buy from branded vendors, the market is sizzling, even if some supply challenges hit various components and vendors. Dell’Oro overall sees steady state Arista and white box vendors grabbing all but 10 per cnet of the revenue growth in 2021.
The interesting thing here is that the datacenter market has learned some important lessons from the supply chain crunch, just as nearly all other businesses have: be ready with as much on hand as you can get because you never know when the next bottleneck will hit or where in the system it might come. ®