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

Thursday, May 19, 2022

Dell'Oro: Microwave transmission equipment up 7% in 1Q 2022

Microwave Transmission equipment revenue grew 7 percent year-over-year in the first quarter of 2022, according to Dell'Oro Group. In the quarter, Huawei and ZTE grew revenues at a faster pace than the market, resulting in significant market share gains for each company compared to the year-ago quarter.

“Sales of microwave transmission equipment started the year strong as operators increasingly added backhaul capacity to cell sites,” stated Jimmy Yu, Vice President at Dell’Oro Group. “While component shortage and supply chain issues are expected to remain a problem for this industry through 2022, we continue to forecast a strong rate of market growth this year. That said, without a shortage of components, the market would be growing at a much higher rate as identified in this quarter,” added Yu.

Highlights from the 1Q 2022 Quarterly Report:

  • Mobile backhaul drove better than expected results in Microwave Transmission. We estimate the Microwave Transmission market grew 7 percent year-over-year (Y/Y) in 1Q 2022 due to a 16 percent Y/Y growth in mobile backhaul. This sharp growth, however, was slightly offset by a decline in the Verticals market.
  • Component shortages and supply chain issues in the quarter seemed to have worsened compared to the prior quarter. We estimate that without component shortages and supply chain issues the Microwave Transmission market could have grown 11 percent Y/Y in the quarter.
  • Significant market share shifts occurred in the quarter with Huawei and ZTE each gaining over 4 percentage points of share compared to 1Q 2021.

Monday, May 16, 2022

IDC offers conservative growth forecast for telecom services market

Worldwide spending on Telecom Services and Pay TV Services reached $1.566 billion in 2021, an increase of 1.6% year over year, according to the International Data Corporation (IDC) Worldwide Semiannual Telecom Services Tracker. 

  • IDC expects worldwide spending on telecom and pay TV services to increase by 1.4% in 2022 and reach a total of $1,588 billion.
  • Europe, Middle East, and Africa (EMEA) market grew 0.2 percentage points faster than forecast in October 2021 Asia/Pacific grew 0.5 percentage points faster 
  • The Americas grew 1.0 percentage points faster 

Some additional observations from IDC:

Inflation should nominally have a positive impact on this market: the operators will be increasing their tariffs, clients will be paying more, and the total value of the market should be growing faster than previously expected. However, inflation also generates a deterioration of consumers' and businesses' purchasing power, thus causing a decrease in demand. It is to be noted that the impact of inflation in the telco services market will be stretched over the next several years. This is because a high proportion of users have two-year contracts with operators that guarantee stable fees until their contracts expire. That also means that the effects of inflation will initially be higher in the markets with a higher proportion of prepaid customers.

War in Ukraine will have a negative effect on the market for communications services in EMEA. It will primarily hit the Ukrainian market, which will see a considerable decline due to destroyed network infrastructure and a huge number of people leaving the country. The Russian market will also decline as local demand will be under pressure due to the recession caused by international sanctions. On the other hand, the war will positively impact the markets of neighboring countries (Poland, Slovakia, and Romania) that are hosting large numbers of Ukrainian refugees.

In addition, the COVID-19 saga has not ended yet. The current lockdowns in China and a possible emergence of new variants of the virus in the rest of the world might bring additional impacts to the market, primarily in the business fixed data services section. Although the previous waves of COVID did not drastically affect the global market for telecom services, the related global supply-chain disruptions are already causing shortages of end-user and network equipment and thus create new concerns for supply side participants. This all contributes to IDC's conservative forecast.

Friday, May 6, 2022

Understanding enterprise networks' multi-cloud spending

Enterprise networks are continuing to ramp up spend on multi-cloud projects whether at the core or edge. But how to understand the return-on-investment (ROI)? 

Paul Parker-Johnson, Principal Analyst at ACG, discusses the latest trends at ONUG Spring 2022.

Thursday, April 28, 2022

Dell'Oro: Increased investment in 5G NR mmWave

Preliminary findings from Dell'Oro Group suggest 5G NR mmWave investments improved in the fourth quarter but this was not enough to change the full-year growth momentum.

Following two years of exponential growth, mmWave revenues increased 15% to 20% in 2021, propelling 5G NR mmWave to account for 1% to 2% of total sub 6 GHz plus mmWave RAN revenues.

Additional mmWave highlights from the 4Q 2021 and 5-Year RAN reports:

  • Ericsson leads the mmWave RAN market.
  • The mismatch between capex and data consumption when comparing the sub-6 GHz and mmWave spectrum will evolve gradually over time – global 5G NR mmWave revenues are projected to reach $1 B to $2 B by 2026.
  • Mobile remains the primary focus, however, gNB and repeater technology advancements are expected to improve the FWA business case.

Thursday, April 14, 2022

Cignal AI: Total optical component revenue by company

Cloud operator capex for hyperscale datacenter expansion drove Datacom optical component revenue growth by 27% to reach $4.7B in 2021, as reported in Cignal AI’s new Optical Components Report. This growth outstripped component revenue growth from Telecom, Consumer, and Industrial optical component applications. Total revenue for optical components across all four segments grew 15% to reach $14.5B in 2021.

The Optical Components Report also tracks detailed unit shipments of Datacom and Telecom transceivers across multiple module types and reaches. Shipments of 400GbE Datacom modules doubled and reached record levels in 2021, as large cloud operators and select enterprise customers transitioned from 100G to this new speed.

“The transition to 400GbE is well underway, and pluggable coherent 400Gbps technology is revolutionizing the design of the optical networks that connect datacenters,” said Scott Wilkinson, Lead Optical Component Analyst at Cignal AI. “400Gbps speeds will drive spending and bandwidth growth both inside and outside the datacenter in 2022.”

More Key Findings from the 4Q21 Optical Components Report:

  • Supply chain difficulties limited Telecom optical components market growth the most in 2021. However, the segment is forecast to grow more than 8% in 2022.
  • Consumer component revenue for 3D sensing applications was flat YoY as lower-cost components offset higher unit shipments.
  • Industrial optical components used for welding and medical applications grew 18% in 2021, following a weak 2020. Following the acquisition of Coherent, II-VI is poised to control over 50% of this market.
  • 1.8M QSFP-DD Datacom modules shipped during 2021, most of which were DR4 format. The report also tracks SR4, FR4, and LR4 Datacom transceivers.
  • Over 60k 400Gbps pluggable coherent modules shipped last year, the majority of which were QSFP-DD ZR. The report captures the shipment details of all the emerging derivatives of this format, including ZR, ZR+, 0dB ZR+, and CFP2 based ZR+.
  • Shipments of 200Gbps coherent CFP2 modules grew 17% to just over 200k units during 2021 as Chinese OEMs ramp this speed (which is less dependent on western technology) for longer distance metro and long haul applications.

Tuesday, April 12, 2022

Vertical Systems: U.S. carrier managed SD-WAN to hit $7.8B by 2026

The U.S. market for Carrier Managed SD-WAN Services is projected to surge to $7.8 billion by 2026, according to latest research from Vertical Systems Group.

Revenue for this rapidly expanding market segment is derived from U.S. customer site installations with SD-WAN Service overlay components plus WAN Access underlay connectivity.

 SD-WAN is one of the three Carrier Managed VPN Services tracked by Vertical, along with MPLS and Site-to-Site VPNs. Migration from MPLS has been a significant growth driver for Carrier Managed SD-WANs, with customers converting to either hybrid MPLS/SD-WAN configurations or full replacements. Despite this ongoing technology migration, U.S. revenue and customer connections for MPLS plus Site-to-Site services still eclipse Carrier Managed SD-WAN.

Tuesday, April 5, 2022

Dell'Oro: Worldwide telecom capex growth to taper off in 2023

Preliminary readings suggest that worldwide telecom capex—the sum of wireless and wireline telecom investments—increased 9 percent year-over-year in nominal USD terms and remain on track to advance 3 percent in 2022 before tapering off in 2023 and 2024, according to a recent report from Dell'Oro Group.

The finding confirm the positive momentum and the growth projections that Dell'Oro Group previously communicated with the telecom equipment programs (Broadband Access, Microwave Transmission & Mobile Backhaul, Optical Transport, Mobile Core Network, Radio Access Network, Service Provider Routers & Switch).

"Telco investments, in general, have shown remarkable resilience to external factors including Covid-19 containment measures, supply chain disruptions, and economic uncertainties," said Stefan Pongratz, Vice President and analyst with the Dell'Oro Group. "Surging wireless investments in the US taken together with non-mobile capex expansions in China will keep the momentum going in 2022," continued Pongratz.

Additional highlights from the March 2022 3-year Telecom Capex forecast report:

  • Global capex growth is expected to moderate from 9 percent in 2021 to 3 percent in 2022, before tapering off in 2023 and 2024.
  • The coupling between carrier investments and manufacturing infrastructure revenues is expected to prevail over the short-term—capex and telecom equipment are on track to advance 3 percent and 4 percent in 2022, respectively.
  • Short-term output acceleration is expected to be relatively broad-based, with investments growing in China and the US. At the same time, challenging comparisons in the US are expected to drag down the overall capex in the outer part of the forecast.
  • Following a strong showing in 2021, capex growth prospects across Europe will be more muted in 2022.

Sunday, April 3, 2022

Cignal AI: 400ZR pluggable coherent modules in 4Q21

Shipments of 400ZR/ZR+ modules surged in 4Q21 as Cisco (Acacia) and Marvell rapidly scaled production capacity, according to the 4Q21 Transport Applications Report from Cignal AI.

However, demand from Cloud Operators is still exceeding supply, which will be increased this year as vendors such as Ciena, Neophotonics, and II-VI grow production. 

Cignal AI expects that shipments of 400ZR/ZR+ modules will triple in 2022 as cloud operators such as Microsoft, Amazon, and Google are joined by traditional network operators such as AT&T, Windstream, and COLT rolling out high volume deployments.

“Both webscale and telco operators are making fundamental changes to their network architectures due to the availability of pluggable 400G coherent modules,” said Scott Wilkinson, Lead Optical Component Analyst at Cignal AI. “Module shipments are ramping up quickly, with more than half of all shipments to date coming in the 4th quarter.”

More Key Findings from the 4Q21 Transport Applications Report:

  • Direct shipments of coherent ports to operators are growing rapidly as pluggable coherent modules reshape the supplier landscape.
  • Shipments of Gen60C pluggable 400ZR modules remain supply-constrained, with only two vendors supplying almost all of the volume to date.
  • Ciena remains the largest supplier of cutting-edge Gen90P 800G capable coherent ports, although Infinera’s ICE6 product shipments are increasing rapidly.
  • Compact Modular revenue in North America grew by +25% in 2021 and now represents over a third of optical hardware shipped in the region. Ciena is the market leader in this category.
  • Only Huawei saw Packet-OTN sales increase during 2021. Nokia’s continuing investment in its OTN portfolio has made it the leading western vendor of OTN, and the company is best positioned to win business from Huawei in Europe.

Thursday, March 31, 2022

IDC: Cloud infrastructure spending to grow 21.7% this year

Spending on compute and storage infrastructure products for cloud infrastructure, including dedicated and shared environments, increased 13.5% year over year in the fourth quarter of 2021 (4Q21) to $21.1 billion, according to the International Data Corporation (IDC) Worldwide Quarterly Enterprise Infrastructure Tracker: Buyer and Cloud Deployment. 

For the 2022, IDC is forecasting cloud infrastructure spending to grow 21.7% compared to 2021 to $90.0 billion, while non-cloud infrastructure is expected to decline slightly, down 0.3% to $59.4 billion. Shared cloud infrastructure spending is expected to grow 25.5% year over year to $64.5 billion for the full year. Spending on dedicated cloud infrastructure is expected to grow 13.1% to $25.4 billion in 2022.

Some highlights from IDC:

  • For the full year 2021, cloud infrastructure spending totaled $73.9 billion, up 8.8% over 2020.
  • Investments in non-cloud infrastructure increased 1.5% year over year in 4Q21 to $17.2 billion, marking the fourth consecutive quarter of growth. 
  • For the full year, non-cloud infrastructure spending increased 4.2% over 2020, reaching a total of $59.6 billion.
  • Spending on shared cloud infrastructure reached $14.4 billion in the fourth quarter, increasing 13.9% compared to a year ago, and grew to $51.4 billion for 2021, an increase of 7.5%. 
  • Spending on dedicated cloud infrastructure increased 12.5% year over year in 4Q21 to $6.7 billion and grew 11.8% to $22.5 billion for the full year 2021. Of the total dedicated cloud infrastructure, 47.5% in 4Q21 and 46.1% in 2021 were deployed on customer premises.
  • In 4Q21, service providers as a group spent $21.2 billion on compute and storage infrastructure, up 11.6% from 4Q20. This spending accounted for 55.4% of total compute and storage infrastructure spending. 
  • For 2021, spending by service providers reached $75.1 billion on 8.5% year over year growth, accounting for 56.2% of total compute and storage infrastructure spending. IDC expects compute and storage spending by service providers to reach $89.1 billion in 2022, growing at 18.7% year over year.

Wednesday, March 23, 2022

5G forecast: 1.3 Billion by Year-End 2022

According to the most recent data from Omdia, the world added 303 million 5G connections year over year, representing a 139% increase from 218 million to 521 million, and sequentially 19% growth quarter over quarter from 437 million in Q3 2021 to 521 million in Q4 2021. According to Omdia’s forecast, 5G is expected to double to 1.3 billion connections in 2022, nearly double again in 2023 to 2 billion connections, and reach 4.8 billion by the end of 2026. Of that, 516 million is expected to come from North America and 301 million from Latin America and the Caribbean.

Chris Pearson, President of 5G Americas said, “We are now out of the opening stages of this generation of wireless cellular technology, as 5G is rapidly getting into the hands of consumers and businesses, who are finding innovative new ways to use mobile connectivity.”

Omdia’s Principal Analyst Kristin Paulin said, “During 2021 5G coverage really expanded, making 5G an option for a lot more people. The major operators in the US have more than 70% coverage. In Canada, 5G really expanded for the three major operators during 2021, with each ending the year with 70% coverage. This is compared to between 24% and 45% coverage, depending on the operator, at the same time last year.”

By region, North America had a total of 72 million 5G connections by the end of 2021, which is an addition of 54 million 5G connections for the year – a gain of 292 percent year over year. Additionally, the region had 514 million LTE connections by the end 2021, which represents near full market maturity.

Overall, the number of 5G commercial networks has reached 216, according to data from TeleGeography and 5G Americas. That number is expected to reach 330 by the end of 2022 and 352 by the end of 2024, representing strong 5G network investment growth in many regions throughout the world.

Dell'Oro: SASE hit 37% growth in 2021

The convergence of WAN enterprise networking and security fueled strong growth in SASE related networking and security technologies, according to a new report from Dell'Oro Group, with the overall growth rate hitting 37%..

“The pandemic made remote work and cloud-based applications necessary, and by doing so, accelerated the obsolescence of the classic hub-and-spoke networking model,” said Mauricio Sanchez, Research Director, Network Security, and SASE & SD-WAN at Dell’Oro Group. “Rather than thinking of networking and security as separate problems to solve, they are now being thought of as a continuum and driving together cloud-friendly networking and security technologies into SASE,” added Sanchez.

Additional highlights from the 4Q 2021 Network Security Quarterly Report:

  • Over 30 vendors compete in the SASE market, but the top ten took in nearly 80 percent of the revenue.
  • Full-year 2021 market revenue for SASE networking consisting of SD-WAN technologies exceeded $2 billion.
  • Full-year 2021 market revenue for SASE security consisting of Secure Web Gateway, Cloud Access Security Broker, Zero Trust Network Architecture technologies surpassed $2 billion.
  • Unified SASE–a subset of the total SASE market consisting of solutions that implement SASE networking and security as an integrated platform–grew nearly 50 percent year-over-year for full-year 2021.
  • Firewall revenue rebounded in 2021 by rising 13 percent and set a new record exceeding $10 billion for the first time.

Sunday, March 20, 2022

Dell'Oro: Double-digit growth for Service Provider router and switching in '21

The worldwide Service Provider Router and Switch market rebounded in 2021 and surpassed pre-pandemic revenue levels, according to a new report from Dell'Oro Group. The North America region led the worldwide market expansion with solid double-digit growth.

“Demand for IP routers, especially in North America, surged last year as network operators pumped up investments across a wide range of network infrastructures,” said Shin Umeda, Vice President at Dell’Oro Group. “Our research found that North American network expansion projects for Internet and cloud backbones, mobile transport, and broadband aggregation all contributed to the region’s first annual increase since 2015,” added Umeda.

Additional highlights from the 4Q 2021 Service Provider Router and Switch Report:

  • Strong growth in North America for 2021 combined with modest gains in the Europe, Middle East, and Africa region offset a drop for the Asia Pacific region that reflected a decline in China.
  • The Service Provider Core Router market expanded for the first time since 2018 as network operators increasingly deployed 400 Gbps technologies to expand network capacity.
  • Cisco was the top-ranked vendor for the 2021 worldwide Service Provider Router and Switch market, regaining leadership that Huawei held for the prior year. Nokia, Juniper, and ZTE, in ranked order, rounded out the top five market share spots.

Thursday, March 17, 2022

Crehan: Amazon and Google deployed >50% of total data center Ethernet switch bandwidth in 2021

The data center Ethernet switch market saw very strong annual bandwidth growth during 2021, with an increase of more than 60%, according to a recent report from Crehan Research Inc. This growth is the largest in four years, despite market bandwidth being five times bigger now. 

A major driver of the strong increase were high-volume 400 gigabit Ethernet (GbE) switch deployments by Amazon and Google, resulting in these two companies accounting for over half of all 2021 bandwidth deployed.

“The insatiable demand for data center networking bandwidth continues," said Seamus Crehan, president of Crehan Research, "with hyperscale cloud service providers at the tip of this spear. Artificial intelligence is one of the latest applications driving robust high-bandwidth growth, as this service-offering from cloud providers gains traction.”

Crehan’s report further shows that it took only about three years for 400GbE to comprise the majority of data center Ethernet switching bandwidth, despite its limited number of early customers. In fact, 400GbE data center switching is just now hitting broad market adoption in terms of number of customers deploying this technology.

"Although the portion of total data center Ethernet networking bandwidth from Amazon and Google has surged over the past couple of years," Crehan said, "it will likely rebalance a bit in 2022 as 400GbE and 200GbE see broader market deployments, starting with Meta and Microsoft early this year."

AT&T leads 2021 U.S. Carrier Managed SD-WAN LEADERBOARD

Vertical Systems Group announced today that the following seven companies achieved a position on the year-end 2021 U.S. Carrier Managed SD-WAN Services LEADERBOARD (in rank order based on site share): AT&T, Comcast Business, Hughes, Verizon, Windstream, Lumen, and Aryaka. These service providers each have two percent (2%) or more of the installed and billable Carrier Managed SD-WAN customer sites in the U.S. as of December 31, 2021.

“The U.S. Managed SD-WAN services market emerged from the pandemic in 2021 with solid growth in new site installations, driven by accelerated network transformations and more flexible solutions for customers,” said Rick Malone, principal of Vertical Systems Group. “Competition is heating up as evidenced by the shake up in top provider rankings on our year-end 2021 U.S. LEADERBOARD benchmark.”

Three companies attained a Challenge Tier citation for 2021 (in alphabetical order): Fusion Connect, MetTel and TPx. This tier includes service providers with between one percent (1%) and two percent (2%) share of U.S. Carrier Managed SD-WAN sites.

Some additional highlights:

  • Rankings changed for five of the seven market leading providers on Vertical’s 2021 U.S. Carrier Managed SD-WAN LEADERBOARD based on latest site share results as compared to the previous year.
  • AT&T retains first position overall for the fourth consecutive year.
  • Comcast Business rises to second position, up from fourth in 2020 based on site share that includes organic growth plus sites added from its Masergy acquisition.
  • Hughes moves to third position, from second overall in 2020. Verizon moves into fourth position, a change from third in the previous year.
  • Lumen advances to rank fifth, up from sixth position. Windstream drops to sixth position from fifth in 2020. Aryaka retains seventh position and rounds out the roster of top providers for 2021.
  • Additionally, TPx drops into the 2021 Challenge Tier from the LEADERBOARD.
  • MEF 3.0 SD-WAN Service Certification has been attained by five of the 2021 U.S. LEADERBOARD companies: AT&T, Comcast Business, Verizon, Lumen and Windstream. Each of these providers also has employees with MEF SD-WAN Certified Professional training certification.
  • Primary technology suppliers to the service providers ranked on the 2021 Carrier Managed SD-WAN LEADERBOARD include Cisco, Fortinet, Versa and VMware. Additionally, SD-WAN providers Aryaka and Hughes utilize internally developed technologies.

Dell'Oro: PON equipment spending up 32% yoy

Total global revenue for the Broadband Access equipment market increased to $16.3B in 2021, up 12 percent year-over-year (Y/Y), according to a new report from Dell'Oro Group. Growth came once again from spending on both PON infrastructure and fixed wireless CPE.

"2021 was a record year for PON equipment spending, with some of the highest growth coming from the North American market, where expansion projects and fiber overbuilds are picking up considerably," said Jeff Heynen, Vice President, Broadband Access and Home Networking at Dell'Oro Group. "These fiber expansion projects show no signs of slowing heading into 2022."

Additional highlights from the 4Q 2021 Broadband Access and Home Networking quarterly report:

  • Total cable access concentrator revenue increased 4 percent Y/Y to just over $1B. Steady growth in Distributed Access Architecture (DAA) deployments helps offset declines in traditional CCAP licenses.
  • Total PON ONT unit shipments reached a record 140 M units for the year, bucking the supply chain constraints that have dogged the cable CPE market.

Monday, March 14, 2022

IDC: Ethernet switch market grew 11.8% yoy while router market rises 7.0% yoy

The worldwide Ethernet switch market grew 11.8% year over year in the fourth quarter of 2021 (4Q21) with revenues reaching $8.5 billion, according to IDC's Quarterly Ethernet Switch Tracker and Quarterly Router Tracker.

Some highlights from IDC:

  • For the full year 2021, the Ethernet switch market recorded $30.7 billion in revenues for a year-over-year growth rate of 9.7%. 
  • The total worldwide enterprise and service provider (SP) router market recorded $4.6 billion in revenues in 4Q21, a 7.0% increase year over year. For the full year 2021, the router market finished with revenues of $15.9 billion, a 6.5% increase compared to 2020.
  • The higher-speed segments of the Ethernet switch market continue to see significant growth driven by hyperscalers and cloud providers. Market revenues for 200/400 GbE switches grew 40.4% from the third quarter to the fourth quarter of 2021, with port shipments increasing 22.9% on a sequential basis. 100GbE revenues increased 17.2% year over year in 4Q21, while port shipments rose 17.3%. 100GbE accounts for just under a quarter (24.7%) of the market's total revenues. 25/50 GbE revenues increased 21.8% year over year in 4Q21 while port shipments rose 2.6%.
  • From a geographic perspective, the Ethernet switch market experienced growth in most regions in both the fourth quarter and full year 2021. In the United States, Ethernet switch market revenues rose 12.2% year over year in 4Q21 and increased 7.0% for the full year. The market in Latin America grew 3.4% year over year in the quarter and rose 7.7% for the full year. And Canada's market grew 7.0% in 4Q21 but was down 1.0% for the full year.In Asia/Pacific (excluding Japan and China), the market rose 24.9% year over year in 4Q21 and grew 15.0% annually in 2021. The market in the People's Republic of China (PRC) grew 21.1% in the quarter and rose 17.5% for the full year. Japan's market declined 14.3% in the quarter and fell 0.8% for the full year.

"Organizations of all sizes around the globe are prioritizing connectivity as a critical component of their digital infrastructure strategies, and that's why we’re seeing solid growth in the Ethernet switch market," said Brad Casemore, research vice president, Datacenter and Multicloud Networks. "The Ethernet switch market faces challenges in 2022, most notably from component shortages impacting supply chains, but also from the economic uncertainty associated with geopolitical conflict. These headwinds will be counterbalanced by the continued buildout of high-speed datacenter network capacity at hyperscalers and other major cloud providers in the quarters ahead."

Thursday, March 10, 2022

Dell'Oro: Data center switch sales hit record levels

Global data center switch revenue posted double-digit growth for the second consecutive quarter, boosting sales to record levels in the fourth quarter and the full year 2021. 400 Gbps ports more than doubled in 2021, with sales comprising 10 percent of the market, according to a recently published report from Dell’Oro Group.

“In line with our expectations, the data center switch market continues to record a remarkable performance despite a macro-economic environment that continues to be defined by limited supply and elevated logistic costs,” said Sameh Boujelbene, Senior Research Director at Dell’Oro Group. “What was also remarkable is that the robust performance was broad-based across all major market segments: Cloud Service Providers (SPs), Telco SPs, and Large Enterprises, all of which grew double-digits and reached an all-time high in sales for the full year 2021. 400 Gbps shipments were also a bright spot in the market, despite pending qualifications and deferred revenue payment at some large Cloud SPs,” added Boujelbene.

Additional highlights from the 4Q 2021 Ethernet Switch – Data Center Report:

  • 400 Gbps deployments started to expand beyond just the hyperscalers, reaching smaller Cloud SPs and large enterprises.
  • Supply challenges continue to impact various products and vendors at various degrees, resulting in some share shifts in the market.
  • Arista, white-box vendors, and Star-Net Ruijie captured 90 percent of the revenue growth in 2021.

Dell’Oro: Strong moment for Ethernet Adapters and Smart NICs

The Ethernet controller and adapter market reached an all-time high of $935 million in 4Q 2021, according to a new report from Dell'Oro Group. It is anticipated that Smart NICs will help propel the market to 19 percent revenue growth in 2022.

“The Ethernet controller and adapter market maintained strong momentum for the third consecutive quarter of record revenue,” said Baron Fung, Research Director at Dell’Oro Group. “Revenue growth was attributed to the increased adoption of higher-speed and Smart NIC ports, as server vendors and cloud service providers gear up to transition to next-generation networks and server platforms. Despite the market reaching new heights, vendors continue to be challenged by on-going supply constraints which limited shipments,” added Fung.

Additional highlights from the 4Q 2021 Ethernet Adapter and Smart NIC report include:

  • Total Ethernet controller and adapter revenue grew 16 percent in 2021.
  • Major cloud service providers are upgrading server connectivity to 100 and 200 Gbps port speeds in conjunction with network upgrades.
  • Smart NICs open vendors such as Marvell, Napatech, and Nvidia accounted for 23 percent of the revenue in 2021 and gained share over internally developed solutions by the major cloud service providers such as Amazon and Microsoft.

Dell'Oro: Data Center CAPEX continues to rise

Most of the major cloud service providers will undergo an expansion cycle this year, which would lift worldwide data center capex by double-digits in 2022, according to a recently published report from Dell'Oro Group. However, persistent supply chain constraints could limit growth.

“In 2021, worldwide data center capex grew nine percent and surpassed $200 billion for the first time,” said Baron Fung, Research Director at Dell’Oro Group. “However, growth mainly came from higher server average selling prices as vendors pass on higher commodity and supply chain costs to end-users, while units grew low single-digits due to supply constraints. New server platforms, equipped with next-generation processors and AI-accelerators also contributed to higher revenue growth. The market is primed for further acceleration this year as vendors navigate through the ongoing sourcing challenges. New data center footprint, network upgrade cycle, and the continued adoption of accelerated computing are expected to drive higher spending among the major cloud service providers and enterprise customers,” explained Fung.

Additional highlights from the 4Q 2021 Data Center IT Capex Quarterly Report:

  • Worldwide data center capex forecast to exceed $240 billion in 2022.
  • Server unit shipments are forecast to return to double-digit growth this year, as supply constraints ease.
  • Hyperscale cloud service providers scheduled to launch services in more than 40 new regions in 2022.

Wednesday, March 2, 2022

Vertical Systems Group: U.S. Wavelength Services LEADERBOARD

Vertical Systems Group announces that eight companies achieved a position on the year-end 2021 U.S. Wavelength Services LEADERBOARD (in rank order based on circuit share): Lumen, Zayo, Verizon, AT&T, Arelion (formerly Telia Carrier), Windstream, Crown Castle and Cox. 

This new benchmark measures U.S. market presence for wavelength providers selling retail and wholesale services. LEADERBOARD companies each have a one percent (1%) or higher share of U.S. wavelength circuits. A wavelength circuit provides a Layer 1 dedicated bidirectional gigabit-speed optical fiber connection between two sites.

“U.S. demand for wavelength services is rising to support mission-critical applications that require assured performance, deterministic latency and gigabit speed connectivity,” said Rick Malone, principal of Vertical Systems Group. “Our forecasts show double digit growth this year, driven by high demand for 100 Gbps wavelength circuits.”

U.S. Wavelength LEADERBOARD Research Highlights

  • Customer demand for retail wavelength circuits exceeded wholesale deployments in 2021.
  • Revenue for U.S. Wavelength Services is projected to grow at a 13% CAGR between 2021 and 2026. This projection incorporates the effects of the COVID pandemic, including installation disruptions and chip shortages.
  • Six providers on the U.S. Wavelength Services LEADERBOARD also hold a rank position on the latest U.S. Fiber Lit Buildings LEADERBOARD – Lumen, Zayo, Verizon, AT&T, Crown Castle and Cox. Additionally, Windstream achieved a Challenge Tier citation.
  • Five U.S. Wavelength Services LEADERBOARD providers are also top ranked on the Mid-2021 U.S. Ethernet LEADERBOARD – Lumen, Verizon, AT&T, Windstream and Cox. Zayo has a Challenge Tier citation.