Data center switch demand outrunning supply: Report

Sept. 16, 2021
And a component shortage looms, according to new research from Dell'Oro Group.
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According to a recent report by Dell'Oro Group, global data center switch market revenue jumped 7% year-over-year in 2Q 2021, marking the second consecutive quarter of revenue growth.

The analyst firm's latest Ethernet Switch – Data Center Quarterly Report offers a detailed view of the market, including Ethernet switches for server access, server aggregation, and data center core.

The report contains in-depth market and vendor-level information on: manufacturers' revenue; ports shipped; average selling prices for both modular and fixed managed and unmanaged Ethernet switches (1,10, 25, 40, 50, 100, 200, 400, and 800 Gbps); and revenue split by market segments, as well as regional breakouts.

Dell'Oro notes that vendors including Arista, Juniper and Star-Net Ruijie outpaced the market and were able to gain revenue share during the quarter. Meanwhile, the new report notes H3C climbed to the leading position in China in 2Q 2021.

"It is encouraging to see the robust sales performance being broad-based across all major regions, and customer segments: cloud service providers (SPs), telco SPs, and large enterprises," commented Sameh Boujelbene, senior research director at Dell'Oro Group, who continued, "Nevertheless, despite these strong results, it is important to note that demand outpaced supply and that sales would have been even stronger had the global semiconductor industry not been constrained."

"We expect demand to remain robust in 2H21, but further tightening in the supply chain may hinder market performance," concluded Boujelbene.

Dell'Oro's 2Q 2021 Ethernet Switch – Data Center Report further notes that stockpiling behavior from some cloud SPs resulted in share shifts in the 100 Gbps segment.

Notably, the new research also finds that interest in 400 Gbps from enterprises and small cloud SPs is slowing down -- but says that major hyperscalers are still on track for accelerated adoption in 2H21.

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