Showing posts with label Research. Show all posts
Showing posts with label Research. Show all posts

Thursday, April 2, 2020

IDC: Cloud infrastructure spending rose 12% in 4Q19

Total end-user spending on IT infrastructure products (server, enterprise storage, and Ethernet switch) for cloud environments, including public and private cloud, recovered in the fourth quarter of 2019 (4Q19) after two consecutive quarters of decline, growing 12.4% year over year in Q4 2019 to $19.4 billion, according to IDC's Worldwide Quarterly Cloud IT Infrastructure Tracker.

"While the beginning of 2020 was marked by supply chain issues that should be resolved before the end of the second quarter, the negative economic impact will hit enterprise customers' CAPEX spending," said Kuba Stolarski, research director, Infrastructure Systems, Platforms and Technologies at IDC. "As enterprise IT budgets tighten through the year, public cloud will see an increase in demand for services. This increase will come in part from the surge of work-from-home employees using online collaboration tools, but also from workload migration to public cloud as enterprises seek ways to save money for the current year. Once the coast is clear of coronavirus, IDC expects some of this new cloud service demand to remain sticky going forward."



IDC's new five-year forecast predicts cloud IT infrastructure spending* will reach $100.1 billion in 2024 with a compound annual growth rate (CAGR) of 8.4%. Non-cloud IT infrastructure spending will decline slightly to $65.3 billion with a -0.7% CAGR. Total IT infrastructure is forecast to grow at a 4.2% CAGR and produce $165.4 billion in spending in 2024.

Some highlights from IDC

The overall IT infrastructure market continued to struggle after its strong performance in 2018, up 3.3% to $38.1 billion in 4Q19 but declining 1.1% to $134.4 billion for the full year. Non-cloud IT infrastructure fell 4.6% to $18.7 billion for the quarter and declined 4.1% to $67.7 billion for the year.
Spending on cloud IT infrastructure in 4Q19 was driven by the public cloud segment, which grew 14.5% year over year to $13.3 billion; private cloud grew 8.2% to $6.1 billion.
IDC expects cloud IT infrastructure will stay above 50% of the IT Infrastructure market at both the quarterly and annual levels, reaching 60.5% annually in 2024.
Across the three IT infrastructure technology domains, storage platforms saw the fastest year-over-year growth in 4Q19 at 15.1% with spending reaching $6.6 billion. Compute platforms grew 14.5% year over year with $10.8 billion in spending while Ethernet switches declined 3.9% to $2.0 billion.
For the full year 2019, Ethernet switches led with year-over-year growth of 5.0% and $8.2 billion in spending, followed by storage platforms with 1.9% growth and spending of $23.1 billion, and compute platforms with growth of 1.5% and spending of $35.5 billion.
IDC's forecast for 2020, after taking into consideration the repercussions of the COVID-19 pandemic and its ensuing economic crisis, is for $69.2 billion in cloud IT infrastructure spending*, a 3.6% predicted annual increase over 2019. Non-cloud IT infrastructure spending is expected to decline 9.2% to $61.4 billion in 2020. Together, overall IT infrastructure spending is expected to decline 2.9% to $130.6 billion.

IDC cuts worldwide IT spending forecast by 2.7% due to COVID-19

Worldwide IT spending is now expected to decline 2.7% in constant currency terms this year as COVID-19 impacts the global economy and forces many organizations around the world to respond with contingency planning and spending cuts in the short term, according to IDC. In line with previous economic recessions, IT spending on hardware, software, and IT services is likely to decline by more than real GDP overall, as commercial IT buyers and consumers implement rapid cuts to capital spending in line with declining revenues, profits, market valuations, and employee headcounts.

"Overall IT spending will decline in 2020, despite increased demand and usage for some technologies and services by individual companies and consumers," said Stephen Minton, program vice president in IDC's Customer Insights & Analysis group. "Businesses in sectors of the economy that are hardest hit during the first half of the year will react by delaying some purchases and projects, and the lack of visibility related to medical factors will ensure that many organizations take an extremely cautious approach when it comes to budget contingency planning in the near term."

Spending on server/storage and network hardware will also decline overall despite strong demand for cloud services as enterprise customers delay purchases during the initial rapid response phase of the current crisis. Total infrastructure spending (including cloud) will increase by 5.3%, but all of this growth will come from enterprise spending on infrastructure as a service (IaaS) and cloud provider spending on servers. Meanwhile, overall server/storage hardware spending will be down by 3.3% and enterprise network equipment spending will decline by 1.7%.

"Hardware spending in general is always identified for rapid spending cuts during any economic crisis, as a means for enterprises to quickly protect short-term profitability," said Minton. "In previous economic crashes, IT hardware has tended to overshoot the economic cycle on both the downside and in the recovery phase. That's because underlying demand drivers don't change overnight, but the timing of purchases is shifted and delayed, and this can now be done even more quickly than in the past. What's different now is that cloud is a bigger factor than it was in any previous global recession, and this should mean that overall spending is less volatile than in the last two major IT spending downturns."

More: https://www.idc.com/getdoc.jsp?containerId=prUS46186120

Monday, March 30, 2020

IDC: COVID-19 impacts Server and Storage sales

The COVID-19 pandemic will impact spending on IT infrastructure.

According to the IDC Worldwide Quarterly Server Tracker and Worldwide Quarterly Enterprise Storage Systems Tracker, under the current probable scenario server market revenues will decline 3.4% year over year to $88.6 billion and external enterprise storage systems (ESS) revenues will decline 5.5% to $28.7 billion in 2020.

The server market is expected to decline 11.0% in Q1 and 8.9% in Q2 and then return to growth in the second half of the year. The external ESS market is forecast to decline 7.3% in Q1 and 12.4% in Q2 before returning to slight growth by the end of 2020 with further recovery expected in 2021.

"The impact of COVID-19 will certainly dampen overall spending on IT infrastructure as companies temporarily shut down and employees are laid off or furloughed," said Kuba Stolarski, research director, IT Infrastructure at IDC. "While IDC believes that the short-term impact will be significant, unless the crisis spirals further out of control, it is likely that this will not impact the markets past 2021, at which point we will see a robust recovery with cloud platforms very much leading the way."

In the longer term both markets will return to growth. The server market is expected to deliver a compound annual growth rate (CAGR) of 4.9% over the 2019-2024 forecast period with revenues reaching $116.6 billion in 2024. Meanwhile the external ESS market will see a five-year CAGR of 1.3% growing to $32.4 billion in 2024.

"The IT infrastructure markets are already going though a transformation and shifts in end user spending will bring an even faster changing IT buyer landscape," said Natalya Yezhkova, research vice president, IT Infrastructure. "While the current crisis brings tensions and uncertainty to the market, it also will push organizations to expedite adoption of technologies and IT delivery models that help with optimization of IT infrastructure resources."




Wednesday, March 25, 2020

Dell'Oro: Tier 1 Cloud Service Providers to resume spending

Cloud data center CAPEX is forecasted for higher growth despite market challenges, according to a recently published report from Dell’Oro Group. The trend is driven by Tier 1 Cloud service providers resuming spending on servers following a pause in 2019.

“Despite recent market uncertainties, we anticipate the Tier 1 Cloud service providers to increase data center capex as planned, primarily on servers, as the sector seeks to resume capacity expansion,” said Baron Fung, Research Director at Dell’Oro Group. “We project a steep decline in enterprise IT spending due to severe near-term supply and demand disruptions from COVID-19. Enterprises will seek to conserve capital during these uncertain times and resort to the Cloud to satisfy near-term demand for digital services. We expect that the Cloud service providers will need to expand their infrastructure at a measured pace to capture this incremental demand,” explained Fung.

Following are additional highlights from the 4Q 2019 Cloud Data Center Capex Quarterly Report:

  • The Top 10 Cloud service providers spent $66 billion, in aggregate in 2019, a 3 percent annual increase.
  • Amazon Web Services maintained a 50 percent Cloud revenue share in 2019, although Microsoft Azure and Google Cloud Platform gained share.
  • Spending on servers projected to compose of 47 percent of data center capex in 2020.

Wednesday, March 18, 2020

IDC: The impact of COVID-19 on the semiconductor sector

International Data Corporation (IDC) has published a report that analyzes the impact of the COVID-19 pandemic on the global semiconductor market and presents several possible outcomes.

"The emergence of COVID-19 has brought with it travel bans and quarantines; massive slowing of the supply chain; uncertainty in the stock market; falling business confidence, and growing panic among the population," said Mario Morales, program vice president, Semiconductors and Enabling Technologies at IDC. "Despite the growing uncertainty and panic, technology suppliers must continue to focus on their long-term investments, maintain engagement with partners and prospects, and look to specific markets for stability. Emerging technologies like 5G, the Internet of Things, high-performance computing, and intelligent edge will be fundamental to an overall recovery by the technology sector."

The report provides a framework to evaluate the market impact through four scenarios that assess the range of possible outcomes. Each scenario is based on varying assumptions and severity of the impact to business for technology suppliers. For each scenario, a range of critical factors are assessed with a resulting updated forecast, presented with leading indicators to help clients navigate this emergency.

Some highlights:

  • There is nearly an 80% chance for significant contraction in worldwide semiconductor revenues in 2020, instead of a previously expected minor overall growth of 2%.
  • There is still a one-in-five chance that a fast, strong bounce back from COVID-19 in 2020 is possible.
  • On a global level, the COVID-19 crisis is just beginning, with too many variables to immediately craft a single forecast in response.
  • The impact to technology supply chains in China are significant, but the timing of the recovery is uncertain.



Saturday, March 14, 2020

IDC: Worldwide server market grew 7.5% in 4Q19

Vendor revenue in the worldwide server market grew 7.5% year over year to $25.4 billion during the fourth quarter of 2019 (4Q19), according to the International Data Corporation (IDC) Worldwide Quarterly Server Tracker. Worldwide server shipments grew 14.0% year over year to just over 3.4 million units in 4Q19.

"While the server market recaptured growth during the fourth quarter, it was a bit of a mixed bag as robust hyperscaler demand benefited the ODM Direct vendor group, which combined with strong non-x86 server purchases to drive the broader market," said Sebastian Lagana, research manager, Infrastructure Platforms and Technologies at IDC. "While the OEM x86 market was tepid, it's worth noting that 4Q18 was one of the most challenging comparison periods in history, during which many OEMs generated double-digit growth and large revenue bases."



Some highlights:

  • The number one position in the worldwide server market in 4Q19 was shared by the combined HPE/New H3C Group and Dell Technologies with revenue shares of 16.3% and 15.7% respectively. 
  • HPE/New H3C Group revenues were down 3.4% year over year while Dell Technologies declined 9.9%. 
  • The third ranking server supplier during the quarter was IBM, generating 9.1% revenue share on growth of 17.6%. 
  • Inspur/Inspur Power Systems was fourth with 6.8% revenue share and year-over-year growth of 12.1%. 
  • Lenovo and Huawei were statistically tied* for the fifth position in the market with market shares of 5.6% and 5.1% respectively. 
  • Lenovo's revenues were down 2.6% year over year while Huawei grew its revenues 1.8% in 4Q19. 
  • The ODM Direct group of vendors accounted for 25.5% of total revenue and was up 37.9% year over year to $6.47 billion. 
  • Dell Technologies led the worldwide server market in terms of unit shipments, accounting for 16.1% of all units shipped during the quarter.

Tuesday, March 10, 2020

Cignal AI: North American optical sales rebound in 2019

Sales of optical equipment in North America rose more than 25% for 4Q19 and 10% for all of 2019, according to the most recent Transport Hardware Report from research firm Cignal AI.

The North American packet market for Access and Aggregation routing devices also grew strongly in the fourth quarter as demand for Edge and Core switching and routing dropped off dramatically. 5G and other access rollouts boosted growth in the Access and Aggregation market segment.

“After three years of North American spending declines as operators focused capex on wireless and access, optical hardware sales for the region revived and grew at a healthy pace for 2019, while packet hardware sales remained flat,” said Scott Wilkinson, Lead Analyst at Cignal AI. “Market leaders Ciena, Infinera, and Cisco all achieved optical sales growth of more than 25% in 2019.”

Some highlights:

  • Long haul optical spending reached record levels in 2019. Growth slowed in 4Q19 but the segment finished the year up over 10%.
  • Transport equipment sales in China declined slightly in 4Q19 as packet sales declined and optical sales growth cooled to single digits. When adjusted for the influence of ZTE’s shutdown in 2Q18, optical hardware sales grew less than 10% in 2019.
  • Japan ended an extraordinary year of optical sales growth up 25% in Q4 and almost 40% in 2019.


https://cignal.ai/2020/03/north-american-optical-sales-rebound-in-2019/

Thursday, March 5, 2020

2019 U.S. Competitive Provider Ethernet LEADERBOARD

Cogent, Zayo, GTT and Sprint have achieved a position on the 2019 U.S. Competitive Provider Ethernet LEADERBOARD, according to Vertical Systems Group’s latest Competitive Provider LEADERBOARD, which ranks companies in order based on U.S. retail Ethernet port share for this segment.

To qualify for the 2019 U.S. Competitive Provider Ethernet LEADERBOARD, companies must have either a top rank or a Challenge Tier citation on the 2019 U.S. Carrier Ethernet LEADERBOARD.

Competitive Provider is one of three U.S. provider segments, along with the Incumbent Carrier and Cable MSO segments. This segment encompasses CLECs, regional and global providers, and specialized carriers selling Ethernet services in the U.S. market.


  • Cogent, Zayo, GTT and Sprint each qualify for a position based on their 2019 Challenge Tier citations.
  • For the third consecutive year, there were no Competitive Providers with a top rank on the 2019 U.S. Carrier Ethernet LEADERBOARD.
  • Other companies in the Competitive Provider segment include the following (in alphabetical order): American Telesis, BT Global Services, Consolidated Communications, Crown Castle Fiber, DQE Communications, Expedient, FiberLight, FirstLight, Fusion, Great Plains Communications, Logix Fiber Networks, LS Networks, Masergy, MegaPath, MetTel, NTT, Orange Business, Segra, Tata, Telstra, TPx, Unite Private Networks, US Signal and other competitive providers selling retail Ethernet services in the U.S.


https://www.verticalsystems.com/2020/03/04/2019-competitive-leaderboard/

Monday, March 2, 2020

Dell'Oro: telecom equipment market grew 2% in 2019

The overall telecom equipment market – Broadband Access, Microwave & Optical Transport, Mobile Core & Radio Access Network, SP Router & CE Switch - advanced 2% during 2019, recording a second consecutive year of growth, according to preliminary figures from Dell'Oro Group.

Full-year 2019 revenue shares relative to 2018 revenue shares for the top five suppliers – the latter indicated here in parenthesis – show that Huawei, Nokia, Ericsson, ZTE, and Cisco comprised 28% (28%), 16% (17%), 14% (14%), 10% (8%), 7% (8%), respectively.

Additional key takeaways from the 4Q19 reporting period include:

  • Following three years of declining revenues between 2014 and 2017, the overall telecom equipment market advanced for a second consecutive year in 2019, validating the message we have communicated for some time now, namely that there are reasons to be excited about the telecom market.
  • Within the technology segments, mid-single digit growth in Optical Transport and RAN was more than enough to offset weaker demand for Microwave Transport and Broadband Access equipment. The two largest equipment markets in the year were Mobile RAN and Optical Transport, together accounting for about 55% of the overall telecom equipment market.
  • The RAN market surprised on the upside and performed better than expected in 2019, propelled by 5G RAN growth that continued to accelerate throughout the year at a torrid pace.
  • The worldwide Optical Transport market continued to expand for a fifth consecutive year, recording the highest growth rate in nearly a decade. Helping to drive this acceleration is robust growth for WDM.
  • Stable demand for PON equipment was not enough to offset declining investments in Cable and DSL, pushing the overall Broadband Access Market to a fourth consecutive year of declining revenues.
  • The efforts by the U.S. government to curb Huawei’s rise has so far had mixed results – we estimate Huawei’s overall telecom equipment share continued to improve in 2019, but the pace of the 2019 share growth was weaker than its average 2014-2019 share growth.
  • ZTE’s revenue share improved by about 2 percentage points in 2019, reflecting a robust recovery since the U.S. ban during 1H18.


https://www.delloro.com/

Monday, February 24, 2020

Vertical Systems Group: 2019 U.S. Carrier Ethernet LEADERBOARD

CenturyLink and AT&T retain the top two rankings on Vertical Systems Group's newly published 2019 U.S. Carrier Ethernet LEADERBOARD.

Seven companies achieved a position on the 2019 U.S. Carrier Ethernet LEADERBOARD. The market leading companies are as follows (in rank order based on year-end 2019 retail port share): CenturyLink, AT&T, Spectrum Enterprise, Verizon, Comcast, Windstream and Cox. Service providers must have four percent (4%) or more of the U.S. Ethernet services market to qualify for a LEADERBOARD rank.

Six companies attained a 2019 Challenge Tier citation (in alphabetical order): Altice USA, Cogent, Frontier, GTT, Sprint and Zayo. The Challenge Tier includes providers with between 1% and 4% share of the U.S. retail Ethernet market.

"The base of U.S. Ethernet ports increased by 8.9 percent in 2019, buoyed by healthy demand for higher speed access to cloud, Internet and VPN services," said Rick Malone, principal of Vertical Systems Group. "During the past year, Ethernet providers focused on better monetizing service features to expand their existing business, while introducing streamlined offers to target the needs of the SMB market."

Highlights of Vertical's 2019 U.S. Ethernet Market Share Analysis

  • CenturyLink continues to hold first position on the U.S. Ethernet LEADERBOARD, followed by AT&T in second position.
  • Spectrum Enterprise moves up to the third position from fourth, surpassing Verizon.
  • Comcast had the highest year-over-year market share growth across the 2019 LEADERBOARD providers.
  • Four Incumbent Carriers (CenturyLink, AT&T, Verizon, Windstream) and three Cable MSOs (Spectrum Enterprise, Comcast, Cox) are represented on the 2019 LEADERBOARD. 

Highlights of Vertical's 2019 U.S. Ethernet Market Share Analysis

  • Retail U.S. Ethernet installations increased 8.9% to more than 1.25 million customer ports.
  • Price compression, particularly for high speed services, continues to limit Ethernet revenue growth.
  • Ethernet is the WAN underlay of choice for Carrier Managed SD-WAN solutions requiring secure, dedicated high speed connectivity.
  • Active fiber build-outs across the U.S. are enabling Ethernet footprint expansions to serve a broader base of mid-market customers.
  • Ethernet service enhancements are providing customers with improved performance, faster installations, and more flexible network configurations.

Sunday, February 23, 2020

Dell'Oro: Mobile Core Network market approaches $8 billion

The Mobile Core Network (MCN) market expanded for the second consecutive year and approached $8 billion in 2019, according to a new report from Dell'Oro Group. Ericsson, Huawei, and Nokia ranked as the top three vendors.

Some highlights from the Mobile Core Network 4Q 2019 report:

  • The top six MCN vendors for 2019, in alphabetical order, were Cisco, Ericsson, Huawei, Mavenir, Nokia, and ZTE. These vendors accounted for over 85 percent of the worldwide MCN market revenue.
  • The regional revenue rankings were: Asia Pacific; Europe, Middle East, and Africa; North America; and Caribbean and Latin America respectively.

“The MCN market is expected to continue to grow in 2020, but at a slower pace,” stated David Bolan, Senior Analyst, Dell’Oro Group. “Some of the contributing factors are an anticipated slow take-up of the 5G Core, slower growth in India due to service providers’ financial stress created by increased tax burdens, and the uncertainty in the European Union resulting from unresolved security concerns. The anticipated growth in 2020 will be to serve the increasing number of 4G and 5G subscribers and associated devices like wearables and tablets, the seemingly unquenchable thirst for data, and the growing use of Internet of Things (IoT) in LTE networks."

Dell'Oro: CBRS RAN investments to surpass $1.5B

The overall CBRS market – LTE plus 5G NR – is expected to grow at a rapid pace between 2019 and 2024 with cumulative RAN investments projected to surpass $1.5 billion, according to the latest Dell’Oro Group CBRS RAN 5-year forecast report.

Other highlights from the CBRS 5-Year Forecast Report:

  • CBRS capex is not projected to have a significant impact on the WLAN capex.
  • CBRS investments are projected to account for a mid-single digit share of the overall North America RAN market.
  • Activity is anticipated to accelerate rapidly during the forecast period. 5G NR is expected to drive the lion share of the service provider CBRS capex in the outer part of the forecast period while LTE will likely dominate the technology mix for FWA, IoT, and Enterprise deployments through the forecast period


https://www.delloro.com/cbrs-ran-market-investments-to-surpass-1-5-b/

Wednesday, February 19, 2020

Cisco: 1.4 billion 5G connections in 3 years



Cisco is predicting 1.4 billion 5G connections by 2023.

Thomas Barnett introduces some key findings of the Cisco Annual Internet Report. One interesting finding - average data rates for 5G smartphones are expected to soar to 575 Mbps over the next few years.

The full Cisco report is posted here.

https://www.cisco.com/c/en/us/solutions/executive-perspectives/annual-internet-report/index.html


Wednesday, February 12, 2020

Spirent on 5G: What to expect in 2020

There is a rush to move past 5G Non-Standalone (NSA) to Standalone (SA) rollouts because it is a quicker path to revenue and profitability for carriers, according to a new report from Spirent Communications.  The “5G: What To Expect In 2020” report draws on the company’s expansive work with operators, network equipment manufacturers and device makers.

“2019 brought worldwide 5G Non-Standalone deployments but meaningful revenues were elusive as operators struggled to break out with market-defining services that could ignite consumer enthusiasm,” said Spirent head of 5G, Steve Douglas. “Spirent’s report goes behind the scenes of our 5G testing engagements to explore what went as planned, where there were stumbles and why the outlook is brightest as stakeholders evolve strategies to capitalize on emerging opportunities, especially in the enterprise.”

Key findings from Spirent’s “5G: What To Expect In 2020” report include:
  • 5G Standalone coming earlier than expected. There is a rush to move past Non-Standalone (NSA) to Standalone (SA) rollouts in an effort to capture revenues in industries like manufacturing, automotive, mobile gaming, manufacturing and beyond. Based on testing timetables, Spirent expects a slate of 5G SA deployments in the first half of 2020. 
  • Smartphone performance challenges extend beyond the device itself. 5G device performance pains stemmed from issues related to the vast number of antennas that must be packed into devices, but also challenges introduced by 5G New Radio, which was not tuned to exploit all capabilities defined within standards. The result sometimes produced performance that looked more like 4G LTE. 
  • Experiences were not optimized to wow consumers. In cases where 5G did deliver anticipated speeds, feature sets and apps were not optimized to take advantage of the speed and bandwidth, meaning consumers couldn’t discern a major experience difference. Spirent expects mobile gaming to be among the earliest consumer use case to capitalize on customized 5G performance boosts. 
  • Assurance now a requirement, not an afterthought. Spirent closed the year having kicked off the first nationwide North American 5G assurance deployment as operators seek to shore up network performance in a bid to deliver the robustness and reliability that will be demanded by enterprise customers.  
  • Some of 5G’s biggest advancements are happening underground. It is ultimately transport networks that will support the data deluge 5G is expected to attract. Significant investment is going toward assuring these networks won’t collapse under heavy demand, with expansive testing efforts underway right now. 


The full report is available online: https://www.spirent.com/assets/rp/rp_5g-what-to-expect-in-2020

Tuesday, February 11, 2020

IDC: 5G could boost 2020 IT spending

Worldwide IT spending is set to increase by 5% in constant currency this year as software and services investment remains stable while smartphone sales recover on the back of a 5G-driven upgrade cycle in the second half of the year, according to an update to the International Data Corporation (IDC) Worldwide Black Books.

"Much of this year's growth is dependent on a positive smartphone cycle as the year progresses, but this is under threat from disruption caused by the Coronavirus crisis," said Stephen Minton, program vice president in IDC's Customer Insights & Analysis group. "Our current forecast is for broadly stable tech spending in 2020, but PC sales will be way down on last year, while server/storage investments will not recover to the levels of growth seen in 2018 when hyperscale service providers were deploying new datacenters at an aggressive pace."

Some highlights from IDC:

  • Excluding smartphones, IT spending will dip from 7% growth in 2019 to 4% in 2020. 
  • Software growth will decelerate slightly from last year's 10% to less than 9% and IT services growth will dip from 4% to 3%.
  • Most of the slowdown will be due to the PC market where the end of the recent buying cycle (partly driven by Windows 10 upgrades) will see PC sales decline by 6% this year compared to 7% growth in PC spending last year.
  • Hyperscale service provider IT spending will recover to 9% growth this year, up from just 3% in 2019, but this is short of the pace of two years ago. 
  • Cloud infrastructure and digital services providers will also continue to increase their IT budgets in order to meet strong end-user demand for cloud and digital services, which will continue to expand at a double-digit rate of growth as enterprise buyers increasingly shift their IT budgets to the as-a-service model.

Tuesday, February 4, 2020

Dell'Oro: Service Provider router market to grow at modest pace

Worldwide sales of Service Provider Routers is projected to exceed $75 billion over the five years from 2020 to 2024, according to a new report from Dell'Oro Group. The delivery and adoption of 5G and cloud services are expected to drive investments in IP networks over the forecast horizon.

“We expect the overall SP Router market to grow at modest, low single-digit rates over the next five years, but there are network use cases such as mobile backhaul and backbone transport that will surge due to the uptake of 5G and cloud services, respectively,” said Shin Umeda, Vice President at Dell’Oro Group. “Vendors with the appropriate hardware and software solutions will benefit from the growth opportunities, but geographic presence will also play a big part in a company’s success,” added Umeda.

Additional highlights from the Router & Carrier Ethernet Switch Five Year Forecast:

  • The Asia-Pacific region, led by China, is expected to produce the highest growth over the next five years.
  • Revenue from 100 and 400 Gigabit Ethernet technologies is projected to account for almost half of router revenue by 2024.

Thursday, January 30, 2020

Dell'Oro: Demand for 400G switch expected to grow this year

Ethernet Switch Data Center port shipments are forecast to surpass 60 million by 2024, with more than 50 percent of the port shipments will operate at 100 Gbps, 400 Gbps and 800 Gbps - according to a recent report from Dell'Oro Group.

“800 Gbps, 400 Gbps, as well as new waves of 100 Gbps will be enabled by faster SerDes technologies and higher speed optics,” said Sameh Boujelbene, Senior Director at Dell’Oro Group. “Optics will continue to play a vital role in the data center switch market. The availability of high volume, low-cost optics is crucial in driving any speed transition. Additionally, as network speed increases beyond 800 Gbps, pluggable optics will hit density and power issues. Hence it will become imminent for the industry to adopt alternative options such as Co-Packaged Optics (CPO). We expect such transition to bring major disruptions to the supply chain as it requires new business and serviceability models,” added Boujelbene.

Additional highlights from the Ethernet Switch – Data Center 5-Year Forecast Report:

  • Demand for 400 Gbps from the broader market is expected to ramp by end 2020 and in early 2021.
  • 400 Gbps and higher speeds are predicted to account for more than 25 percent of port shipments by 2024.

Dell'Oro: 5G backhaul transport equipment sales to hit $3B by 2024

5G mobile backhaul transport equipment revenue will reach $3 billion by 2024. Demand for 5G backhaul is expected to drive multiple years of growth for the total mobile backhaul transport market for the next few years, according to a new report from Dell'Oro Group.

“We anticipate the Mobile Backhaul Transport market to return to a period of growth as operators roll out 5G,” said Jimmy Yu, Vice President at Dell’Oro Group. “Hence, we are predicting that demand for backhaul equipment will grow at an average annual rate of four percent for the next four years, surpassing $5 billion annually. We suspect this demand will mostly further the sales of fiber backhaul equipment initially, but in the long term, there will be a growing share of new deployments using wireless backhaul,” Yu added.

Highlights from the Microwave Transmission & Mobile Backhaul 5-Year Forecast Report:

  • Over 50 percent of Mobile Backhaul Transport revenue and over 35 percent of Microwave Transmission revenue will be from equipment deployed in 5G networks by 2024.
  • 5G is also expected to drive the use of transport systems to increase the span between mobile radios and baseband units. As such, we forecast a strong adoption of Mobile Fronthaul during the forecast period.


https://www.delloro.com/news/5g-mobile-backhaul-transport-equipment-revenue-will-reach-3-billion-by-2024/

Wednesday, January 15, 2020

IDC: Vendor revenue for cloud infrastructure dipped in 3Q19

Vendor revenue from sales of IT infrastructure products (server, enterprise storage, and Ethernet switch) for cloud environments, including public and private cloud, declined 1.8% year over year in the third quarter of 2019 (3Q19), according to IDC's Worldwide Quarterly Cloud IT Infrastructure Tracker. The decline was softer than the dip experienced in 2Q19, and leading IDC to slightly increase its forecast for total spending on cloud IT infrastructure in 2019 to $65.4 billion, which represents flat performance compared to 2018.

IDC said the decline in cloud IT infrastructure spending was driven by the public cloud segment, which was down 3.7% year over year, reaching $11.9 billion; sequentially from 2Q19, this represents a 24.4% increase. As the overall segment is generally trending up, it tends to be more volatile quarterly as a significant part of the public cloud IT segment is represented by a few hyperscale service providers.

Some highlights:
  • Vendor revenue in the public cloud IT segment is expected to reach $44 billion in sales for the full year 2019, a decline of 3.3% from 2018. 
  • Vendor revenue in the private cloud IT segment increased 3.2% year over year, reaching nearly $5 billion. IDC expects spending in this segment to grow 7.2% year over year in 2019 to $21.4 billion.
  • The IT infrastructure industry is approaching the point where spending on cloud IT infrastructure consistently surpasses spending on non-cloud IT infrastructure. In 3Q19, cloud IT environments accounted for 53.4% of vendor revenues. However, for the full year 2019, spending on cloud IT infrastructure is expected to stay just below the 50% mark at 49.8%. This year (2020) is expected to become the tipping point with spending on cloud IT infrastructure staying in the 50+% range.
  • Vendor revenue for Ethernet switches is the only segment expected to deliver visible year-over-year growth in 2019, up 11.2%, while spending on compute platforms will decline 3.1% and spending on storage will grow just 0.8%. Compute will remain the largest category of cloud IT infrastructure spending at $34.1 billion.
  • Sales of IT infrastructure products into traditional (non-cloud) IT environments declined 7.7% from a year ago in 3Q19. 
  • For the full year 2019, worldwide spending on traditional non-cloud IT infrastructure is expected to decline by 5.3%. 
  • By 2023, IDC expects that traditional non-cloud IT infrastructure will only represent 41.9% of total worldwide IT infrastructure spending (down from 51.6% in 2018). 
  • Geographically, declines in the U.S., Western Europe, and Latin America were driven by overall market weakness; in these and some other regions 3Q19 softness in cloud IT infrastructure spending was also affected by comparisons to a strong 3Q18. In Asia/Pacific (excluding Japan), the second largest geography after the U.S., spending on cloud IT infrastructure increased 1.2% year over year, which is low for this region. However, it is in comparison with strong double-digit growth in 2018. Other growing regions in 3Q19 included Canada (4.9%), Central & Eastern Europe (4.6%), and Middle East & Africa (18.1%).


https://www.idc.com/getdoc.jsp?containerId=prUS45899920

Tuesday, January 14, 2020

Gartner: Worldwide semiconductor revenue drops 11.9% in '19

Worldwide semiconductor revenue totaled $418.3 billion in 2019, down 11.9% from 2018, according to preliminary results by Gartner, Inc. The report cites the drop in the memory market as the top reason for the decline. Sales analog products’ declined 5.4% while optoelectronics grew 2.4%.

“The memory market, which accounted for 26.7% of semiconductor sales in 2019, experienced a 31.5% decline in revenue in 2019,” said Andrew Norwood, research vice president at Gartner. “Within memory, DRAM revenue declined 37.5% due to an oversupply that started at the end of 2018 and lasted throughout 2019. The oversupply was caused by a sudden fall in demand from the hyperscale market. This revealed excessive OEM inventory levels that took the first half of the year to correct. Excessive inventory at DRAM vendors in the second half of 2019 pushed pricing lower and resulted in an average selling price (ASP) decline of 47.4% in 2019.”

“In 2020, we expect to see semiconductor market revenue increase after the high inventory clearance to drive up the chip ASP, especially in the memory sector,” said Mr. Norwood. “The U.S.-China trade war seems to be easing as we move into 2020. However, during 2019 the U.S. added several Chinese companies, including Huawei, to the Entity List restricting the sale of U.S. components. The immediate impact was to push Huawei into looking outside the U.S. for alternative silicon suppliers, with wholly owned HiSilicon at the top of the list as well as alternative suppliers based in Japan, Taiwan, South Korea and China. This will be an area to watch in 2020.”

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