Thursday, June 23, 2011

Infonetics: Data Center Equipment Slows in 1Q11

In 1Q11, the worldwide data center network equipment market, which includes data center Ethernet switches, application delivery controllers (ADCs), and WAN optimization appliances, declined 7% from the previous quarter, but is up 2% year-over-year (1Q10 to 1Q11), according to Infonetics' First Quarter (1Q11) Data Center Network Equipment report.

"After massive growth (+50%) in 2010, the data center network equipment market is slowing significantly in 2011, as some of the 2010 drivers like pent-up demand disappear and new challenges arise, such as slowing public sector spending. This dynamic is already playing out, with sales down on a sequential basis in the first quarter and year-over-year increases moving down to single-digit percent territory. Purpose-built data center Ethernet switches continue to enjoy strong growth as buyers transition to these devices to better address performance requirements in their data centers," notes Matthias Machowinski, directing analyst for enterprise networks and video at Infonetics Research.

Some other highlights:

  • In 2010, the global data center equipment market grew to $8 billion, and Infonetics Research forecasts it to top $10 billion by 2015.

  • Cisco continues to lead the data center Ethernet switching market by far, with over 80% market share.

  • ADC market leader F5 increased quarterly revenue only slightly, but gained 4 points of market share as rivals Cisco and Citrix declined.

  • The data center equipment markets in Asia Pacific (APAC) and Central and Latin America (CALA), posted strong year-over-year growth in 1Q11, driven by emerging economies.