Growth in faster data centre switch market to counteract steep price drops
Mon 28 Jul 2014
A recent forecast predicts that the steady sales growth in faster and more expensive Ethernet switches should counteract decline in the segment and allow total market prices to hold stable.
The report by leading research firm, Crehan suggests that competition will result in lower per-port costs on 10, 40 and 100 Gigabit Ethernet switches, which in turn will spark increased adoption and result in a stable overall Ethernet data centre switch average selling price (see diagram below).
“Despite the onslaught of data centre traffic and unprecedented network demands, high-speed data centre switches thus far have been too expensive to drive widespread adoption, but this is about to significantly change,” said Seamus Crehan, president of Crehan Research.
“Aside from continual cost reductions and port-density improvements, price drops are being driven by factors such as increased competition in the data centre switch market (including numerous recent entrants), low-priced white box and merchant operating system offerings, and the price negotiating power of some of the very large, hyper-scale public cloud vendors,” he added.
In terms of figures, Crehan predicts that this market migration to higher speed switches will boost Ethernet data centre switch revenue up to approximately $14bn in the next four years. Additionally, the report forecasts a strong introduction of 10 Gigabit Ethernet for data centre server access, and 40 and 100 Gigabit Ethernet for data centre uplink, aggregation and other key operations.