Slowdown in Cloud Capex Weighed on Datacentre Switching Growth in Q1

In BICSI Bytes, Newsby info@bicsi.com.au

According to the latest Dell’Oro Group ‘Ethernet Switch – Datacentre Quarterly Report’, the slowdown in Cloud capex growth-rate weighed on the datacentre switch market growth in 1Q 2019, with the year-over-year (YoY) growth of falling below 5% for the first time in almost five years.

“The deceleration of Cloud capex spending started in the second half of 2018, but appeared more severe at certain Cloud Service Providers (SPs) this quarter,” said Sameh Boujelbene, Senior Director at Dell’Oro Group. “However, our analysis of Cloud capex indicates that the second half of 2019 will grow at a higher rate.

“Despite this deceleration, Arista, one of the vendors with high exposure to Cloud SPs, managed to gain share to capture 20% of the North American market, while Cisco was the top-ranked vendor with more than 40% share.”

Additional highlights from the report:

  • 25 GE and 100 GE composed about half of the market revenue and two-thirds of shipments;
  • 400 GE shipments continued to ramp for the second consecutive quarter, driven mostly by Google; and
  • 100 GE ports are expected to nearly double in 2019, while the 400 GE refresh cycle is not expected to have a material effect until 400 GE optics become available in 2020.