According to Dell'Oro Group, the data center switching market recorded the strongest year-over-year revenue growth in more than five years in the first quarter of 2018. A new report from the market research firm states that100 Gigabit Ethernet (100GbE) port shipments more than doubled year-over-year, and 100GbE switch ports contributed to over 30% of total revenue. For a third consecutive quarter, Arista's revenue has more than doubled year-over-year outside of the U.S.
"[The] data center switching market grew 16% year-over-year in the first quarter of the year," said Sameh Boujelbene, senior director at Dell'Oro Group. "This strength was broad-based across both the cloud and enterprise segments. Capital spending by hyperscale customers such as Google, Microsoft, and Facebook, as well as smaller Tier 2 and 3 cloud service providers was really strong in the first quarter of 2018, contributing to the strong growth in switching and 100 gigabit ports. In addition, we saw a recovery in IT spending from large enterprises that also had a high appetite for 25 and 100 Gigabit Ethernet."
The figures come from Dell'Oro Group's 2018 first quarter "Ethernet Switch – Data Center Quarterly Report," which covers Ethernet switches for server access, server aggregation, data center core, and campus core, and addresses software separately. The report contains market and vendor-level information on manufacturers' revenue, ports shipped, and average selling prices for both modular and fixed, and fixed managed and unmanaged Ethernet switches (by speed, including 1000 Mbps, 10 Gbps, 25 Gbps, 40 Gbps, 50 Gbps, 100 Gbps, 200 Gbps, and 400 Gbps), as well as breakouts by region.
Cisco's data center switching sales demonstrated some signs of recovery in China, as Dell'Oro expected. Information provided by IHS Markit earlier this year further supports this report. According to the IHS data center networks intelligence service, data center network equipment revenue reached $13.7 billion in 2017, an increase of 13% over 2016 (see "Revenues from data center network equipment hit $13.7 billion in 2017: IHS Markit").
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