White box switch sales pause

A pair of market research reports suggest that the drive to replace conventional data center switches with more generic white box switch alternatives took a pause in the second quarter of 2015. However, neither IHS (NYSE: IHS) nor Dell'Oro Group suggest the trend is over.

Dell'Oro states in its most recent "Ethernet Switch – Data Center Quarterly Report" that white box switch vendors saw their sales decline in the second quarter while other vendors enjoyed success.

"The quarter was highlighted by strong growth from Chinese vendors, such as Huawei, and headwinds among enterprises adopting 10GbE for server access and 40GbE in the spine/aggregation layer," according to Alan Weckel, vice president of Ethernet Switch – Data Center market research at Dell'Oro.

"Looking forward to the second half of 2015 and early 2016, the Ethernet Switch – Data Center market is about to undergo the largest upgrade the market has ever seen as cloud providers begin to deploy next-generation silicon solutions from Broadcom, Cavium, and Mellanox. We expect record-setting port shipments of 100GbE as the industry moves from 10GbE SerDes-based silicon to 25GbE SerDes-based silicon. The question is to what degree will this change impact white box vendors," Weckel added.

Meanwhile, IHS says in its new "IHS Infonetics Ethernet Switches report that global Ethernet switch sales grew 9% sequentially in the second quarter of 2015 to hit $5.6 billion. But, again, white box switch vendors didn't benefit. However, IHS analysts were more overtly bullish on white box sales going forward.

"We did see muted demand for white box switch solutions, as web-scale data center operators await the release of 25/100GbE solutions later this year, and once these become available, we expect the white box segment to become a key growth driver again," said Matthias Machowinski, research director for enterprise networks and video at IHS.

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