Dell’Oro’s Ethernet Switch – Data Center Quarterly Report revealed that spending on Ethernet data center switches declined in the first quarter of 2024, falling for the first time since the fourth quarter of 2020.
Dell’Oro reports that the overall decline is driven by decreased spending in the broader front-end network, although Ethernet data center switch spending is increasing in AI back-end networks.
Sameh Boujelbene, Dell’Oro Group vice president, said in a press release, “In line with our expectations, backlog normalization, inventory digestion, and spending optimization caused a decline in Ethernet data center switch sales in the first quarter of the year. The decline was broad-based across Cloud Service Providers as well as Enterprise segments, though certain accounts performed better than others depending on where they are in the digestion cycle.”
The report also shows that 200 Gbps, 400 Gbps, and 800 Gbps switch sales saw growth in the quarter and predicts that 400 Gbps and 800 Gbps adoption will increase in 2024 and 2025.
