Datacenter Networks Begin to See Higher Bandwidth Speeds

Networks belonging to mid- and large-sized organizations will undergo a major overhaul in flexibility, speed and architecture as they replace traditional Ethernet switches with infrastructure related to software-defined networks, according to a new market study.

In its most recent long-range forecast of the data-center switch market, analysts at Crehan Research Inc. project annual growth rates of more than 100 percent for sales of data-center switches that will make 40Gbit/sec and 100Gbit/sec speeds the standard.

By 2017, the majority of the revenue from spending on datacenter Ethernet switches will come from systems offering 40Gbit/sec Ethernet for secondary network connections and 100Gbit/sec Ethernet for links within the datacenter and network backbone, according to Seamus Crehan, president of Crehan Research and former Ethernet switching analyst for network market-analysis firm the Dell’Oro Group.

In addition to replacing traditional Ethernet with higher-bandwidth versions, the new generation of switches will include a range of software-defined-network (SDN) approaches, better per-port pricing for high-bandwidth connections, higher port densities and fewer options for port types, Crehan reported. Datacenter-class Ethernet switches launched during the past few months, for example, include far more ports for 100Gbit/sec and 40Gbit/sec Ethernet than ports for 10Gbit/sec or Gigabit Ethernet. They also include more support for non-proprietary network-configuration or management applications and automation to simplify network changes, traffic- or security audits and other administrative tasks.

Despite rapid growth in both flavors, sale of 40Gbit/sec Ethernet switches will outpace those of 100Gbit/sec due to better pricing, a wider variety of functions and special features, and higher port densities, Crehan’s survey showed.

Sales of 40- and 100Gbit/sec Ethernet products make up a little more than 10 percent of all datacenter switches this year, but could approach 70 percent by 2017. Sales of 100Gbit/sec switches will remain tiny compared to 40Gbit/sec until 2015, when its growth will begin to accelerate, though by 2017 customers will buy three 40Gbit/sec Ethernet units for every one of 100Gbit/sec Ethernet.

The global market for all Layer 2/3 Ethernet switches reached $5.28 billion during the first quarter of 2013, though that total represents growth of just 2.1 percent compared to a year earlier, according to research firm IDC. Sales of 10Gbit/sec switches grew 12.9 percent to $1.87 billion in the first quarter, compared to the same period in 2012.

Comparatively lax sales of Gigabit Ethernet and 10Gbit/sec Ethernet do show growing interest in higher-bandwidth switches, but don’t indicate whether the whole datacenter Ethernet switch market will be upended soon. “GbE is still expected to hold its own for the foreseeable future, we expect 10GbE and 40GbE to drive the wired infrastructure market forward in the coming years, both in the datacenter as well as campus core deployment,” according to Rohit Mehra, VP of network infrastructure at IDC.

As the market evolves, there should be increasing differences in the proportion of 10, 40 and 100Gbit/sec Ethernet port sales, to the point that the mix within corporate datacenters varies significantly as differences in bandwidth requirements and budget limits change the speed of adoption in different global regions and vertical markets, Mehra added.


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