Dell'Oro Group Predicts Surge in Data Center Switch Deployments for 2025

Strong Rebound Expected in Data Center Switch Deployments

According to a recent report released by Dell'Oro Group, a well-established authority on telecommunications and data networks, the market for front-end data center switches is poised for a significant rebound in 2025. This comes after a slowdown in 2024, which analysts attribute to temporary market conditions. The report highlights that sales of Ethernet data center switches, critical for connecting general-purpose servers in traditional front-end networks, are anticipated to surge as the industry navigates towards more advanced and robust solutions.

Factors Driving Growth

Market experts
Sameh Boujelbene, Vice President at Dell'Oro Group, points out several key factors contributing to this expected growth. The demand for additional capacity in front-end networks is rising sharply, mainly driven by ongoing deployments of new back-end systems, especially in greenfield projects. These factors are expected to advance the adoption of high-speed connectivity solutions, with speeds exceeding 100 Gbps commanding a premium in pricing.

Moreover, applications leveraging inferencing capabilities across centralized and edge locations are expected to fuze the sales growth further. The convergence of requirements for enhanced data processing capabilities with the necessity for speedier connections places Ethernet data center switches in a favorable light, propelling industry sales.

As the report anticipates that sales could surpass $180 billion between 2025 and 2029, it raises curiosity about which entities will capitalize on this trend. Prominent vendors such as Accton, Arista, Celestica, Cisco, Juniper, Huawei, and NVIDIA are identified as potential key players in this emerging landscape. Their varied strategies in addressing market demand could significantly shape the future trajectory of the data center network ecosystem.

Deployment Forecasts

Further insights shared in the report indicate that over the next five years, the deployment of more than 100 million switch ports at speeds of 800 Gbps and 1600 Gbps will be anticipated in front-end networks. This expansion will leverage state-of-the-art chip technologies capable of delivering 51.2 terabits per second (Tbps) and 102.4 Tbps bandwidths. It’s important to note that shipments in back-end networks are projected to be at least double those in the front-end networks, highlighting a robust inclination towards data center infrastructure upgrades.

Adoption rates for SONiC (Software for Open Networking in the Cloud) are also expected to increase, achieving a penetration rate ranging from 10% to 20% in Tier 2 and Tier 3 Cloud Service Providers (SPs) and large enterprises by 2028. Furthermore, the forecast indicates a growing acceptance of alternative optical form factors in addition to conventional optics. Innovative solutions like Linear Drive Pluggable Optics (LPO) and Linear Receive Optics (LRO) are expected to gain traction, enhancing overall system efficiency.

Comprehensive Insights

The report, titled 'Ethernet Switch - Data Center 5-Year January 2025 Forecast Report', offers an in-depth overview of market trends while including comprehensive tables showcasing critical data such as manufacturers' revenue, port shipments, and average selling price predictions across a range of technologies. It categorizes information by port speeds and technology types, allowing businesses to make informed decisions based on robust analysis.

About Dell'Oro Group

Founded to facilitate vital strategic assessments in telecommunications and data networking, Dell'Oro Group specializes in delivering analytical insights through a fusion of quantitative data and qualitative analysis. Companies looking to optimize their market strategies can refer to Dell'Oro Group's offerings to enhance understanding of market landscapes and competitive dynamics. For further inquiries regarding the report, individuals are encouraged to reach out directly via email or through available contact numbers.

This anticipated rebound in data center switch deployments signals a wave of transformative developments in the data center management landscape, setting a promising stage for both existing and new players poised to elevate their market positioning.