Report discerns slowdown in data center equipment sales

Infonetics Research reveals that worldwide revenue for data center network equipment declined 11% sequentially in 1Q13, to $2.3 billion.

Jul 10th, 2013

Infonetics Research recently released highlights from its 1st quarter 2013 (1Q13) Data Center Network Equipment report, which tracks data center Ethernet switches, application delivery controllers (ADCs) and WAN optimization appliances.

The report reveals that worldwide revenue for data center network equipment, including data center Ethernet switches, ADCs and WAN optimization appliances, declined 11% sequentially in 1Q13, to $2.3 billion. Further, the research finds that following record sales in 2012, ADC revenue dipped 7% sequentially in 1Q13 and is only slightly positive (+2%) from a year ago due to declining sales to the U.S. federal government and delays in tier 1 telco projects. WAN optimization revenue is also apparently declining, due to feature integration and market saturation, claims Infonetics.

“Following 2 strong years of investment, growth in the data center equipment market is starting to slow,” comments Matthias Machowinski, directing analyst for enterprise networks and video at Infonetics Research. “While the near term outlook remains positive, ultimately we think the market is headed for a peak, as data center operators improve infrastructure utilization, and adoption of cloud services moves hardware consumption from enterprises to large-scale data center operators.”

Related: Infonetics says optical network market to grow in 2013 on strength of 100G

Notwithstanding the perceived market slowdown, the research finds that the market for purpose-built data center switches grew 30% year-over-year in 1Q13. The report also finds that that, thanks to its partnership with Cisco -- who exited the ADC market last year -- Citrix is gaining momentum in the ADC space, growing market share by almost 10 points in the last year and gaining on the number one market share holder, F5.

Infonetics’ quarterly data center equipment report provides worldwide and regional market size, vendor market share, forecasts through 2017. Companies tracked include 3Com/H3C, A10 Networks, Alcatel-Lucent, Allot, Array Networks, Blue Coat, Brocade, Cisco, Citrix, Dell (Force10), Expand, F5, HP, IBM (BNT), Ipanema, Juniper, Packeteer, Radware, Riverbed and others. More information is available here.

More news: Analyst says optical networks will soon embrace virtualization

More in Data Center