Worldwide revenues associated with data center switch sales dropped 9% year-on-year, according to a recent report by Dell’Oro Group. The decline was the first in the space in nine years, the market research firm states in its Ethernet Switch – Data Center Quarterly Report. However, it might not be the last.
The downturn was broadly based, both across vendors and regions. The North American market wasn’t as weak as those in other regions, says Dell’Oro in the report. Similarly, Juniper Networks saw its fortunes improve during the quarter. But the real winners in the first three months of the year were white box hardware vendors, which saw double-digit revenue growth, thanks largely to strong demand from Google and Amazon.
“The COVID-19 pandemic has created some positive impact on the market as some customers pulled in orders in anticipation of supply shortage and elongated lead times,” said Sameh Boujelbene, Senior Director at Dell’Oro Group. “Yet this upside dynamic was more than offset by the pandemic’s more pronounced negative impact on customer demand as they paused purchases due to macro-economic uncertainties. Supply constraints were not major headwinds during the first quarter but expected to become more apparent in the next quarter,” added Boujelbene.
Revenues in 1Q20 sat at the lowest level in three years, says Dell’Oro. Company analysts now forecast that overall data center switch revenues will decline by a high single-digit number in 2020, although some niches will be spared.
Dell’Oro’s Ethernet Switch – Data Center Quarterly Report covers such market aspects as Ethernet switches for server access, server aggregation, and data center core. Software is addressed separately. The report contains market and vendor-level information on manufacturers’ revenue, ports shipped, average selling prices for both modular and fixed managed and unmanaged Ethernet Switches (1000 Mbps and 10, 25, 40, 50, 100, 200, and 400 Gigabit Ethernet), and regional breakouts.
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