Data center switch market to approach $16 billion

USA: In its most recently published Data Center Switch Long-Range Forecast Report, Crehan Research Inc. predicts that the Data Center Switch market will approach $16 billion by 2017. The report shows that Ethernet, including Fibre Channel-over-Ethernet, will become an ever-increasing portion of the overall market.

Furthermore, within the Ethernet segment, Crehan also anticipates very strong growth for both 10GBASE-T switches and 40 Gigabit Ethernet-capable switches (40GbE).  These trends are illustrated in the accompanying figure.

"Given the mid-2012 step-function increase in 10GBASE-T server adapter and LAN-on-Motherboard shipments and subsequent introduction of numerous attractively-priced 10GBASE-T data center switches, we expect exponential growth in 10GBASE-T switch port shipments," said Seamus Crehan, president of Crehan Research.

"We believe the strong ramp in 40GbE will be driven by the following factors. First, the upgrade to 10 Gigabit Ethernet (10GbE) switches in the server access layer should drive 40GbE deployments in the uplink, aggregation and core sectors of data center networks. Second, 40GbE, with its QSFP interface, also can be used as four individual 10GbE links which not only provides very high 10GbE switch port density but also gives uplink/downlink and oversubscription/wire-speed flexibility."

The report predicts robust increases for 100 Gigabit Ethernet Switches (100GbE), but indicates that while 100GbE will likely be an important long-term data center switch technology, prices and port densities have a way to go before it achieves a meaningful market impact.

Outside of the majority Ethernet segment, Crehan forecasts that Infiniband switches will continue growing at a much faster pace than the overall data center switch market. Infiniband recently enjoyed one of the fastest speed transitions seen in data center networking, with FDR (56Gbps) comprising a majority of ports about one year after initial shipments.

In contrast with Infiniband, Crehan predicts that the Fibre Channel switch market is reaching a plateau. However, shipment declines are expected to be gradual as Fibre Channel remains a key datacenter storage networking technology.

Continued growth in the data center switch market — especially 10GbE — despite weakness in other areas of the networking market is consistent with Crehan's most recent quarterly findings.