Ethernet Bandwidth Surges on Migration to Gigabit Services
Fancy Wang
Helping Global Enterprises Optimize Network Performance | Ethernet Card & Switch Solutions
Fancy Wang 0622 2020
The following information comes from the network
Vertical Systems Group’s latest ENS (Emerging Networks Service) research for the U.S. retail Carrier Ethernet market shows solid growth through 2023, driven by customer migration to higher bandwidth services that ensure reliable, dedicated network connectivity. Gigabit speed services are boosting growth in bandwidth, ports and revenue, despite declines in average pricing.
Total bandwidth for Ethernet ports installed at U.S. customer sites is projected to more than triple during the five-year projection period to 2023.
Port growth for both the 10+ Gbps and 1 Gbps segments is projected at double digit CAGRs.
100 Mbps is the most widely installed port speed.
Revenue growth is lagging port growth as a result of ongoing price compression, as well as competition in major markets.
Average pricing is declining across every Ethernet service and speed combination as billed to the customer (i.e., ‘street price’ net of discounts).
Ethernet DIA has the highest revenue growth outlook through 2023.
End-user IT infrastructure spend has recovered in 4Q19 after two quarters of decline.
IDC: 4Q19 picks up cloud infrastructure market
This is according to the IDC Worldwide Quarterly Cloud IT Infrastructure Tracker and encompasses server, enterprise storage, and Ethernet switch for cloud environments, including public and private cloud.
The 12.4% year-over-year growth in 4Q19 yielded $19.4 billion in spending.
The fourth quarter results also brought the full year into positive territory with annual growth of 2.1% and total spending of $66.8 billion for 2019.
Meanwhile, the overall IT infrastructure market continued to struggle after its strong performance in 2018, up 3.3% to $38.1 billion in 4Q19 but declining 1.1% to $134.4 billion for the full year.
Non-cloud IT infrastructure fell 4.6% to $18.7 billion for the quarter and declined 4.1% to $67.7 billion for the year.
In 4Q19, growth in spending on cloud IT infrastructure was driven by the public cloud segment, which grew 14.5% year over year to $13.3 billion; private cloud grew 8.2% to $6.1 billion.
As the overall segment is generally trending up, it tends to be more volatile at the quarterly level as a significant part of the public cloud IT segment is represented by a few hyperscale service providers.
After a weaker middle part of the year, public cloud ended 2019 barely up 0.1% to $45.2 billion.
Private cloud grew in 2019 by 6.6% to $21.6 billion.
As investments in cloud IT infrastructure continue to increase, with some swings up and down in the quarterly intervals, the IT infrastructure industry is approaching the point where spending on cloud IT infrastructure consistently surpasses spending on non-cloud IT infrastructure.
The fourth quarter of 2019 marked the third consecutive quarter of cloud IT leadership with the annual share just slightly below the midpoint (49.7%).
From here on out, IDC says it expects cloud IT infrastructure will stay above 50% of the IT Infrastructure market at both the quarterly and annual levels, reaching 60.5% annually in 2024.
Across the three IT infrastructure technology domains, storage platforms saw the fastest year-over-year growth in 4Q19 at 15.1% with spending reaching $6.6 billion.
Compute platforms grew 14.5% year over year with $10.8 billion in spending while Ethernet switches declined 3.9% to $2.0 billion.
For the full year 2019, Ethernet switches led with year-over-year growth of 5.0% and $8.2 billion in spending, followed by storage platforms with 1.9% growth and spending of $23.1 billion, and compute platforms with growth of 1.5% and spending of $35.5 billion.
IDC's forecast for 2020, after taking into consideration the repercussions of the COVID-19 pandemic and its ensuing economic crisis, is for $69.2 billion in cloud IT infrastructure spending, a 3.6% predicted annual increase over 2019.
Non-cloud IT infrastructure spending is expected to decline by 9.2% to $61.4 billion in 2020.
Together, overall IT infrastructure spending is expected to decline by 2.9% to 130.6 billion.
The COVID-19 pandemic represents a severe threat to global growth.
Prior to the outbreak, the expected global real GDP growth was to be lacklustre 2.3% (at market exchange rates) in 2020.
The emergence of the epidemic in China is a game-changer and the expected growth for 2020 is now -0.2%, the slowest rate since the global financial crisis.
The negative effect on growth will come via both demand and supply channels.
On one hand, quarantine measures, illness, and negative consumer and business sentiment will suppress demand in specific areas, while certain pockets of demand will surface, such as cloud platforms for communication and collaboration workloads.
At the same time, closure of some factories and disruption to supply chains will create supply bottlenecks. IDC expects these effects to be distributed unevenly across the market landscape.
"While the beginning of 2020 was marked by supply chain issues that should be resolved before the end of the second quarter, the negative economic impact will hit enterprise customers' CAPEX spending," says IDC infrastructure systems, platforms and technologies research director Kuba Stolarski.
"As enterprise IT budgets tighten through the year, public cloud will see an increase in demand for services. This increase will come in part from the surge of work-from-home employees using online collaboration tools, but also from workload migration to public cloud as enterprises seek ways to save money for the current year. Once the coast is clear of coronavirus, IDC expects some of this new cloud service demand to remain sticky going forward."
IDC's new five-year forecast predicts cloud IT infrastructure spending will reach $100.1 billion in 2024 with a compound annual growth rate (CAGR) of 8.4%.
Non-cloud IT infrastructure spending will decline slightly to $65.3 billion with a -0.7% CAGR. Total IT infrastructure is forecast to grow at a 4.2% CAGR and produce $165.4 billion in spending in 2024.
Nearly 290 Million Multi-Gigabit Ethernet Switch Ports to Ship over the Next Five Years, According to Dell'Oro Group
1 Gigabit Ethernet to Finally Peak in 2021
According to a recently published report by Dell'Oro Group, the trusted source for information about the telecommunications, networks, and data center IT industries, nearly 290 million multi-gigabit (2.5/5.0 Gbps) Ethernet switch ports will ship over the next five years. In the meantime, 1 gigabit Ethernet (1 Gbps) will peak in 2021.
"The campus switching market is entering an era of multi-year growth driven by new requirements of the digital transformation and an overdue refresh cycle," said Sameh Boujelbene, Senior Director at Dell'Oro Group. "As enterprise customers are upgrading their networks, they are considering new feature sets as well as higher speeds, such as 2.5/5.0 Gbps. We expect 2.5/5.0 Gbps to ramp significantly over our forecast horizon, driven mostly by Wi-Fi 6 Access point connectivity and high-end applications. In the meantime, while we predict 1 Gbps to start a long-term decline in 2021, this speed is forecast to still drive two-third of the campus switch port shipments in 2023," added Boujelbene.