The market for Data Center network equipment continues to accelerate at rapid pace. According to Infonetics Research 3Q11 Data Center Network Equipment report, global revenues are up by 12 percent on a year-over-year basis. Forecasting for the full 2011 year, Infonetics is projecting total revenues to be up by six percent over 2010. The outlook for 2012 is even brighter with a forecast for double-digit growth.
While all areas of the market are seeing growth, there is one in particular area that is growing at an exponential rate.
"We are most impressed with the Purpose Built Data Center Ethernet Switch category, which demonstrated 842 percent year-over-year growth. It’s astounding!" said Sam Barnett, directing analyst, Data Center and Cloud told InternetNews.com. "This makes it very clear that convergence is at hand. 10G and 40G will set the stage for a true data center fabric."
While 10 Gbps based equipment has been in market for some time, the market is just now beginning to see 40 Gbps based gear.
"We saw our first 40G shipments in the last two quarters and vendors are not breaking things out yet," Barnett said. "I expect that to change over the next few quarters."
The 40G Ethernet standard itself is a relatively new one having only been approved in June of 2010 by the IEEE, a leading developer of international standards. A number of vendors have recently added 40G equipment to their portfolios, including HP and Alcatel-Lucent.
In terms of vendor share, Cisco continues to lead the market while HP was passed for the No.2 spot by F5. In Infonetics Data Center Network Equipment category, HP shipped $138,271,073 worth of product during 3Q11. In contrast. F5 shipped $177,262,621 in the same time period. The bulk of F5's revenues are derived from application delivery controllers (ADC).
"In 2Q11, HP shipments totaled approximately $166M while F5 shipments totaled $153.4M, so the positions did reverse," Barnett said.
But there is a catch and, as always, the details matter. The way that Infonetics calculates the market has a direct impact on HP's position relative to F5.
"Note that in the Data Center Network Equipment category, we do not include the HP LAN switching gear, which would skew the overall results," Barnett said.
While HP and F5 are trailing Cisco, there is another key competitor to Cisco's Data Center Networking dominance that is emerging, China's Huawei.
"Huawei is certainly a competitor to Cisco and is proving to be a formidable competitor," Barnett said. "We track Huawei in our other service offerings since they have not traditionally played in the data center centric space up until now. As they add additional reporting tiers, I will begin breaking out their data center networking-centric product shipments."