Data center switch deployments are all about location, location, location

LONDON - October 21, 2020

The demand for data center (DC) switching continues to expand. “This is especially evident at edge locations as more companies continue to position their DC networks closer to end users, providing them with higher bandwidth and lower latency performance.” said Devan Adams, principal analyst at Omdia

According to Omdia’s Data Center Network Equipment Market Tracker, data center switch port deployments at edge locations are expected to grow at a five-year compound average growth rate (CAGR) of 10 percent from 2019-2024. “DC switch port growth at the edge will be driven by numerous factors, including accelerated use of IoT devices and applications requiring increase compute, storage and networking for management, control, and support; and new technologies and services such as 5G, cloud gaming, augmented reality and virtual reality (AR & VR), 3D and 4K video streaming.” said Devan Adams, principal analyst at Omdia.

Enterprises reign supreme at the data center edge

Omdia forecasts DC Ethernet switch ports deployed in edge located data centers (defined as locations with a maximum 20 millisecond round trip time (RTT) to the end user device, machine, or application; see chart above) to account for 30% of all DC Ethernet ports shipped in 2024, up from 27% in 2019. Enterprises are the largest DC switch deployers at the edge, representing 75% of all edge ports shipped in 2019.

Exhibit 1: Data center switch port deployments at edge locations

Service providers (cloud and telcos) are expected to dominate non-edge locations by 2024, owning 66% of all non-edge located ports in that timeframe, up from 46% in 2019.

Exhibit 2: Data center switch port deployments at non-edge locations

The use cases for edge located datacenters continue to develop as many enterprises like retail, financial and manufacturing; and telcos experience increased strain on their networks due to rising bandwidth demands from end users due to abundant usage of compute intensive applications including artificial intelligence and machine learning (AI & ML), autonomous driving, genomic data etc.

-ENDS-

About Omdia

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