Data Center Network, SAN Equipment Poised for Growth: Report
The results from market research firm Infonetics Research’s third quarter of 2010 (3Q10) Data Center Network Equipment and SAN Equipment market share and forecast reports suggests those two markets are well-positioned for impressive growth in the years ahead. The company forecast the worldwide SAN equipment market to more than double from 2010 to 2014, when it will reach $6.6 billion, and found data center network equipment market is poised for 67 percent growth in 2010
SAN switch and SAN adapter revenue grew to $683 million worldwide in 3Q10, up 7 percent from 2Q10 (up 16 percent over 3Q09), with market leaders QLogic and Emulex, who dominate the SAN adapter space, each giving up a small amount of revenue market share to competitors Chelsio, Brocade, Mellanox and others sequentially and year-over-year. Infonetics research found Brocade easily maintained its top SAN switch market share position, although second-place Cisco continued to gain share with consecutive quarters of growth all year
"The SAN equipment market is moving along nicely, driven by the deployment of growing gargantuan gigabytes of storage each quarter, which in turn is fundamentally driven by the creation and accumulation of video and data content in data centers around the globe, a large chunk of which is consumer-generated," said Michael Howard, co-founder and principal analyst for carrier and data center networks at Infonetics. "We see steady growth ahead, with most of the economic downturn behind us, particularly in North America, which had 45 percent of worldwide SAN revenue in the third quarter of 2010. North America houses some of the world’s largest data center operators, media companies, and content providers."
A separate Infonetics report found worldwide revenue from data center network equipment, including data center Ethernet switches, application delivery controllers (ADCs), and WAN optimization appliances, grew two percent in 3Q10 over 2Q10 to $1.9 billion, with growth was led by sales in North America and the Europe Middle East and Africa (EMEA) region.
Infonetics predicted 10G port penetration to reach about 50 percent by 2014, aided by rapidly falling prices; 10G accounts for 14 percent of data center switch ports in 3Q10, much higher than in the total Ethernet switch market. F5 continued to build its lead in ADC revenue share in 3Q10, and Citrix revenue jumped 25 percent, surpassing Cisco for the first time, Infonetics research found.
"A new round of data center upgrades is underway, driven by virtualization, surging amounts of data, the growing need for storage, under-investment in 2009, and renewed life in the financial sector," said Matthias Machowinski, directing analyst for enterprise networks and video at Infonetics Research. "Even with a relatively flat third quarter and an expected down fourth quarter, the market for data center network equipment is poised to grow 67 percent in 2010 over 2009 to hit a milestone $7.6 billion worldwide."